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Amazon.com Inc. faces an in-depth European Union probe into a 2003 fiscal deal with Luxembourg over suspicions the company unfairly shifted profits to the Grand Duchy to lower its taxes.

The tax ruling, still in force today, applies to an Amazon subsidiary in Luxembourg that records most of the companys profits, the EU said today.

Most European profits of Amazon are recorded in Luxembourg but are not taxed there as a result of the pact, the EU said in a statement.

The EU inquiry into Amazon comes amid a global crackdown on corporate tax-avoidance as governments struggle to increase revenue and reduce deficits. It expands a probe into Apple in Ireland, Starbucks Corp. (SBUX) in the Netherlands and Fiat Finance & Trade in Luxembourg. The commission has said tax avoidance and evasion in the EU cost about 1 trillion euros ($1.3 trillion) a year.

Luxembourg hasnt provided any detail about any expiry date for that tax ruling, a person familiar with the case said. The Brussels-based commission has the power to ban and order recovery of selective public subsidies, including tax advantages, that distort competition.

Luxembourgs Finance Ministry and Amazon didnt respond to requests for comment ahead of the EUs statement.

The Financial Times reported earlier on the Amazon case.

Tax probes including delving into Apples agreements with Ireland are a priority, according to the woman set to take over from Almunia as the European Unions competition chief.

Margrethe Vestager, a former Danish economy minister, said last week that its important big companies pay a fair share of taxes and that small firms arent left to carry the burden.

Apple and Irish authorities have rebuffed a preliminary EU finding that the country gave favorable tax treatment in return for job creation. Gibraltar said last week that Almunia showed Spanish bias for probing the territorys tax system.

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Amazon Faces EU Tax-Dodging Probe Over Luxembourg 2003 Deal

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MOSCOW, September 12 (RIA Novosti), Anastasia Levchenko - As the European Union has imposed a new round of sanctions against Russia over Ukraine, first analyses on the future repercussions appear in the Western media with some praising Europe's US-backed decision and others cautioning against the negative effects of sanctions to western economies, and underlining Russia's re-orientation to the East and Ukraine's to the West.

CONCERTED WESTERN EFFORT

The Guardian reported on Friday that "the latest sanctions are designed to keep up pressure on Russia, which denies sending troops into eastern Ukraine and arming the separatists. Moreover, the US is understood to be planning to limit access to Russian banks, including Sberbank, later on Friday as part of a concerted western effort to penalize what it sees as Russian attempts to destabilize Ukraine by backing pro-Russia separatists with troops and weapons."

The joint European position fully corresponds to American line of reasoning. ABC News cites Martin Schulz, European Parliament President, as saying at a conference in Kiev on Friday that the new round of sanctions was a sign to Moscow that there will be "no return to business as usual." In response to that, Ukrainian President Petro Poroshenko thanked EU countries for "their solidarity with Ukraine".

President of the European Council Herman Van Rompuy stated that The Permanent Representatives Committee or Coreper will assess the implementation of the peace plan in Ukraine by the end of the month. Sanctions could be amended, suspended or repealed in whole or in part depending on the conclusions of this assessment, according to the Prague Post.

"The new EU sanctions introduced today certainly take things to a tougher level," CNN quotes Sunny Mann, a partner at law firm Baker & McKenzie, as saying. "At the same time, there is a signal that the EU is prepared to roll things back if the current crisis is de-escalated."

The New York Times reports Poroshenko as saying it would be "impolite" for the European Union not to take the next step, known as "accession partnership" and designed to steer toward membership. Ukraine is expected to ratify an association agreement with the European Union next Tuesday.

STEP TO THE WEST, STEP TO THE EAST

ABC News underlines how Ukraine welcomes the new sanctions and even expresses gratitude and thus cites Poroshenko thanking EU countries for "their solidarity with Ukraine".

AFP emphasizes that "Ukraine looks West" and makes steps to "cement" Kiev's ties with the European Union and Washington.

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Western Media on Anti-Russia Sanctions: Nobody Stands to Win in This Tit-for-Tat Battle