Photograph by Daniel Acker — Bloomberg via Getty Images
By John Kell
October 7, 2014

European regulators have launched a formal probe into Amazon.com’s tax deals in Luxembourg, according to media reports.

The European Commission has alleged the tax treatment of Amazon’s (AMZN) operations in Luxembourg allowed the retailer to reap “potentially illegal state subsidies for its European operations for almost a decade,” according to a Financial Times report. Investigators believe Luxembourg gave Amazon favorable terms in a 2003 tax ruling, the FT reported, citing people familiar with the matter.

An Amazon representative wasn’t immediately available to comment on the alleged probe.

The e-commerce giant becomes the latest firm to face questions about taxes it pays on the continent.

Media reports over the summer speculated that a European Union inquiry into tax deals had spread to Amazon, after regulators said in June that they had opened formal investigations into the tax practices of three major corporations operating in three different European nations: Apple (AAPL) in Ireland, Starbucks (SBUX) in the Netherlands and a division of auto maker Fiat SpA in Luxembourg. As The Wall Street Journal and others have pointed out, the probe could result in the European Commission clawing back any taxes that it deems haven’t been paid.

The European Commission is one of the main institutions of the 28-member European Union, and is meant to implement policies and spending. The commission says that while there is no need for across-the-board harmonization of member states’ tax systems, it has also sought to reduce tax avoidance in Europe by closing certain loopholes.

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