Economy & Politics

Luxembourg occupies the heart of the “Amazon system”

A study by researchers from the City University of London, published this Friday, shows that the Grand Duchy serves as the epicenter of the American giant’s model of tax optimization on a planet scale.

A study by researchers from the City University of London, published this Friday, shows that the Grand Duchy serves as the epicenter of the American giant’s model of tax optimization on a planet scale.

(Jmh with Thomas Klein) – If Amazon has taken center stage since the 1990s for having revolutionized online sales and having been a pioneer in streaming or the use of the cloud, the American giant has also innovated from the point of view tax by taking advantage of differences in legislation at the international level. A hidden face in which Luxembourg plays a key role, according to the conclusions of the study published Friday by researchers from the City University of London.



European justice validated on Wednesday the tax rulings obtained by the American giant in Luxembourg, disavowing the Commission which saw illegal state aid in the amount of 250 million euros which it had demanded repayment.


Carried out on behalf of the left-wing group in the European Parliament, the analysis shows that “Luxembourg is at the center of Amazon’s system of coordinated global losses, which at the same time generates non-repatriated profits”. Clearly, the group’s subsidiaries located in the Grand Duchy would serve as a platform for the distribution of income and losses generated at the international level. The aim is to tax only profits made in the United States, in accordance with American law.

An effective technique since according to the researchers’ calculations, in 2020, Amazon was able to claim 13.4 billion dollars (11 billion euros) in losses after Uncle Sam’s tax authorities, while these international subsidiaries were earning the same year 17.2 billion dollars (14.1 billion euros) in profits never repatriated to the United States. And therefore imposed. In this diagram, Luxembourg branches “inexplicably represent around 75% of all Amazon’s international sales,” the study notes.

“The losses that Amazon intentionally produces around the world are pooled in Luxembourg to be claimed for tax credits in the United States”, assures Martin Schirdewan, co-chair of the left group in Parliament, which judges that ” what Amazon is doing is bordering on legality ”. An assertion that the firm of Jeff Bezos denies, which justifies such tax arrangements by the fact that “it is expensive to set up, develop and maintain international operations and activities (…), the latter risk to not to become sustainably profitable ”.

Solicited by our colleagues from Luxemburger Wort, the group did not respond to requests for comment on this study. For Martin Schirdewan, on the other hand, the conclusion of this study should accelerate the establishment of global harmonization in terms of taxation and transparency. A process which should result in particular in the introduction of a global minimum tax of 21%. An idea for which Luxembourg has officially voted in favor.


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