EU hits Amazon with $294mn fines over ‘illegal tax benefits’

Bloomberg

Amazon.com Inc. was hit by a European Union order to pay 250 million euros ($294 million) plus interest in back taxes to Luxembourg as the world’s biggest online retailer became the latest US giant to fall foul of the bloc’s state-aid rules.
The European Commission also said it’s suing Ireland for foot-dragging in its efforts to recover “even part” of last year’s record 13 billion-euro bill from Apple Inc.
The Irish finance ministry attacked the EU’s decision to go to court as “wholly unnecessary.”
“Amazon was allowed to pay four times less tax than other local companies subject to the same national tax rules” and “this is illegal under EU State aid rules,” EU Competition Commissioner Margrethe Vestager said in an emailed statement. These were “illegal tax benefits” as a result of which “almost three-quarters of Amazon’s profits were not taxed.”
The Amazon decision adds to a growing list of scalps for Vestager in her crackdown on tax loopholes. It follows the Apple decision last year, which reverberated across the Atlantic with the EU accusing Ireland of granting unfair deals that reduced the company’s effective corporate tax rate.
At stake in all these decisions are billions of euros that multinational companies have squirreled away in tax havens, out of the reach of authorities in the countries where they make most of their sales.
In the Amazon case, the EU concluded that the level of the royalty payments, endorsed by the tax ruling, was inflated and “did not reflect economic reality.” The structure at issue in the EU probe was in place from May 2006 to June 2014, the commission said.
The company then changed to a new structure that is outside the scope of the commission’s state aid investigation. Fresh from levying record antitrust fines on Google, Vestager has insisted she’s not singling out American companies, pointing to European firms that have been penalised.

Amazon ‘sole tenant’ in Seattle
office tower
Bloomberg

Amazon.com Inc. has leased all of the office space in a $570 million Seattle skyscraper scheduled to open in 2020 in the heart of downtown, continuing its local expansion as it looks for a second headquarters in North America.
The Seattle-based retailer and web-services behemoth agreed to rent 722,000 square feet of the 1.17 million-square-foot Rainier Square building, developer Wright Runstad & Co. said. Terms weren’t disclosed. “They’re still growing in Seattle,” said Greg Johnson, president of Wright Runstad. Most of the equity for the project is being put up by a pension client of JPMorgan Chase & Co.’s asset-management arm, which will own the property through a partnership with Wright Runstad.
The 58-story Rainier Square tower is set to be the city’s second-tallest, behind Columbia Center. Plans call for 200 luxury apartments on top of the offices, and retail space that will include an Equinox fitness club and organic food market.