Report claims Amazon’s Luxembourg tax deal probably broke rules

An investigation into a tax deal struck between Amazon and Luxembourg has revealed that it may not be legally sound.

The European Commission announced in October that it had begun investigating allegations surrounding Amazon’s arrangement with the tiny landlocked European country to minimise the company’s tax bill.

The result of this agreement has seen Amazon operating almost tax-free across the European continent, which has been picked up on by many in this period of financial instability for the region.

Now the findings of this report have been published. According to Reuters, the view is that the the Amazon Luxembourg agreement may have been unlawful.

“The Commission’s preliminary view is that the tax ruling of 5 November 2003 by Luxembourg in favour of Amazon constitutes state aid,” reads the report’s conclusion, “and the Commission has doubts at this stage as to that ruling’s compatibility with the internal market.”

In other words, Luxembourg appears to have given Amazon an unfair advantage through its tax agreement.

Related: Amazon reveals 5bn items sold in 2015, breaks sales record

Amazon isn’t the only international company being investigated by the European Commission. Other suspiciously generous agreements, such as Apple’s cosy deal with Ireland and Starbucks’s similar deal with the Netherlands, are also under the microscope.

It could prove to be a costly period for the world’s biggest tech (and coffee shop) companies.

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