Thursday newspaper round-up: Amazon.com, Google, Bank Rate

The European Commission is to probe Amazon’s tax status in Luxembourg, the Guardian reported on Thursday.

The commission has expanded its investigation into the tax treatment of multinational firms and opened a formal inquiry into the online retailer’s tax arrangements in the European country, which grant the firm £90bn in state aid.

Amazon's sister company, Amazon EU Sàrl, is a Luxembourg limited partnership but, crucially, it is not subject to Luxembourg tax.

“As a result, most European profits of Amazon are recorded in Luxembourg but are not taxed in Luxembourg,” the European commission said in a statement.

“At this stage the commission considers that the amount of this royalty [...] might not be in line with market conditions.

Google is embroiled in a tax dispute with the French government which could lead to problems for other multinationals across Europe, with other investigations and pressures to change their tax structures.

That tax case centres on Google France, which French tax investigators argue is a façade for tax evasion, allowing the tech giant to funnel profits to jurisdictions which have more lenient tax laws, The Wall Street Journal Europe writes.

The “high and rising” pound is increasingly a source of worry. Together with the increasing risks surrounding the outlook for the Eurozone, that reinforces the case against an early rise in Bank Rate, the business lobby said, The Times reports.

Gap chief executive Glenn Murphy will step down next year, The Wall Street Journal reported.

Having reversed a long-running sales slump, Murphy has decided leave the firm and he will be replaced by Art Peck, currently the head of the company's digital division. Following the news, the clothing firm saw its shares fall by 7% in after-hours trading on Wednesday.

The Federal Reserve intends to revise its forward guidance about its future interest rates but policymakers are "terrified of a market misunderstanding" according to the minutes of its September meeting, the Financial Times reported.

The minutes from the meeting the Fed held between 16-17 September showed that Fed's officials are increasingly worried that weak growth in the foreign markets could damage US exports, while the strength of the dollar could hold the inflation well below the 2% level targeted by the Fed.

On Wednesday the European Commission gave the green light for EDF Energy to begin construction of the giant nuclear reactor at Hinkley Point, in Somerset. The cost of the project could rise to as much as €34bn. The decision marks the start of a renaissance for the country’s nuclear industry, according to The Times.

The UK economy may be growing, but it has slowed, the British Chambers of Commerce (BCC) warned. That follows disappointing performances by the manufacturing and services sectors, with the strong upsurge seen in the former at the start of the year having now run its course.