The European Union has ordered AMAZON to pay about 250 million euros ($294 million) in taxes to Luxembourg, saying it was given an unfair tax advantage from 2003 because it paid less than they would have paid in France or Germany. The EU is retroactively changing taxes. This is a sure fire way of telling companies to get out of Europe. If no matter where you build your plant, if you would have been paying a higher tax in France or Germany, the EU says that is not fair and you have to pay more in BACK TAXES.
In restructuring companies, taxes were always NUMBER ONE after Country Risk. The EU has just made Country Risk paramount. Honestly, I would have to advise companies NOT to set up shop inside the EU. Best to go to the UK and pay any tariff than to be retroactively taxed because the EU is broke. This is introducing a whole new Country Risk into the mix. The EU is becoming a no-go-zone for business. You cannot retroactively change laws no less go back almost 15 years in search of more money.
Can you imagine if congress changes the tax rate and then says it is to be applied backward for your entire life? Politicians are just insane. It’s time to reboot the entire political-economic system. We cannot keep doing this!
It is now too risky to business in Europe for they are changing the rules retroactively.
