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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