The European Commission issued a statement on 4 October 2017 to the effect that it had ordered Amazon to repay EUR 250 million plus interest that it claims Amazon should have paid in taxes on European sales made by the group through its Luxembourg subsidiaries. The legal basis for the decision is that the endorsement of the group’s transfer pricing arrangements by the Luxembourg tax authorities infringed the EU’s state aid rules. These rules are designed to prevent individual Member States distorting competition through granting benefits to some businesses but not to others. The transfer pricing arrangements for royalties paid by the Luxembourg Company that operated Amazon’s European retail business did not reflect market conditions according to the Commission. As a result a significant proportion of the EU sales revenue was stripped out of that company into another Luxembourg group entity that was not taxed on that income.  That resulted in Amazon not being taxed on three-quarters of its European sales profits according to the Commission. At the same time the European Commission announced that it was referring Ireland to the EU’s Court of Justice for failing to recover EUR 13 billion of aid that they say was granted by Ireland to Apple in respect of its own European tax arrangements. Although both Ireland and Apple have appealed the Commission’s decision on that claim, Ireland should still have recovered the aid from Apple or at least made sufficient progress in that direction, according to the Commission.