Amazon.com, Inc. (NASDAQ:AMZN) is the latest technology giant to fall under the scanner of EU Watchdog, as the European regulators investigate the tax arrangements of the company with Luxembourg. The online retailer has joined the likes of Apple Inc (NASDAQ:AAPL) and Starbucks Corporation (NASDAQ:SBUX) facing similar tax probes.
The primary area of investigation is to identify any additional state aid that the online retailer received against the state aid rules of the European regulators, although neither Amazon nor Luxembourg commented over the inquiry. According to the commission, Amazon.com, Inc. (NASDAQ:AMZN) got special tax ruling for its Luxembourg subsidiary, Amazon EU Sarl, which allowed the unit to pay royalty to the parent company, hence reducing its tax liabilities. In fact, the company had an additional advantage over its competitors by paying lower taxes.
In most of the cases, companies found guilty in such tax probes are required to pay fine equivalent to the financial aid it received in the process.
Earlier, the iPhone-maker Company, Apple Inc (NASDAQ:AAPL), became a part of EU tax probe under which Apple was accused of pressurizing the Irish government to offer special tax privileges and hence enjoyed an advantage over the local players. If found guilty in the investigation, the iPhone make might end up paying up to €1 billion in tax settlements and EU can even end the low-tax benefits it enjoys in Ireland.
In addition to the current EU tax probe, Amazon.com, Inc. (NASDAQ:AMZN) is facing a lawsuit from its own employees demanding remuneration for the time they spend in waiting lines. According to the workers, the screening process takes up to 30 minutes every day during which the workers couldn’t carry phones or any other media devices for entertainment. Therefore, the workers are demanding payment for the time considering that they have no useful purpose solved during the period. The Supreme Court is likely to hear the proceedings starting October 8 and give a judgment accordingly.
This article has been written by Prakash Pandey.