Luxembourg acted as Amazon's 'business partner'

Luxembourg acted as Amazon's 'business partner'

A former top Amazon employee has revealed that European Commission president Jean-Claude Juncker acted as a “business partner” to the company when it came to negotiating its tax arrangements.

Bob Comfort, the former head of tax for Amazon, has given an interview with Luxembourg newspaper d’Lëtzebuerger Land revealing that Juncker, the former Luxembourg prime minister, pursued the global online company when it was deciding where to base it European headquarters.

The revelation has increased the pressure on Juncker, who is already facing allegations he offered selected multinationals sweetheart deals on tax, according to the Guardian. It also follows October’s announcement of a formal investigation into Amazon’s preferential corporate tax agreement with Luxembourg by the European commission.

In the interview, Comfort said: “The Luxembourg government presents itself as business partner, and I think it’s an accurate description: it helps to solve problems.”

Speaking about meetings with top civil servants from the finance ministry and Juncker, who was then serving as both prime minister and finance minister, Comfort said: “His message was simply: ‘If you encounter problems which you don’t seem to be able to resolve, please come back and tell me. I’ll try to help.’”

Comfort is currently the “honorary consul for the Seattle region”.

A spokesperson for Amazon said: “Amazon has received no special tax treatment from Luxembourg – we are subject to the same tax laws as other companies operating here.”

Comfort’s interview comes a week after the UK Chancellor George Osborne revealed he would levy a 25% tax on the profits of multi-national corporations who choose to structure their companies overseas to avoid paying high levels of corporation tax in the country where they make high sales. Nicknamed the Google tax, the new rule means Amazon will have to pay 25% tax on its UK economic activity, unless it dismantles its current tax-avoiding structure. Bricks and mortar rivals to Amazon have welcomed the move, saying it "levels the playing field."

A Treasury source told the Guardian: “HMRC already has a pretty good idea of the companies that use these kind of structures and will be issuing notices to those companies. Companies then have 30 days to dispute the payment but if HMRC believes they are using the structure they would have to pay immediately. Obviously there may be companies that may not be on HMRC’s radar. We would expect them to report to HMRC that they are using these structures. If they don’t, that would be illegal.”