The European Commission has ordered Amazon to repay €250m (£222m) for benefiting from illegal and unfair state aid courtesy of Luxembourg.
A ruling in the tiny Euro nation reduced Amazon's tax bill for more than eight years, from May 2006 to June 2014. But the commission today decided that tax break was not justified.
Amazon now has to repay tax benefits worth a relatively trivial €250m ($294m), plus interest, the commission said in a statement.
Competition Commissioner Margrethe Vestager said the "illegal tax advantages to Amazon" had allowed almost three-quarters of the company's EU profits to go untaxed, allowing it to pay four times less tax than local rivals.
It follows a decision earlier today by the Commission to refer Ireland to the Court of Justice over its failure to recover illegal tax benefits from Apple worth up to €13bn (£11.5bn, $15bn).
Amazon said: "We believe that Amazon did not receive any special treatment from Luxembourg and that we paid tax in full accordance with both Luxembourg and international tax law. We will study the Commission's ruling and consider our legal options, including an appeal."
Luxembourg's Finance Ministry said: "As Amazon has been taxed in accordance with the tax rules applicable at the relevant time, Luxembourg considers that the company has not been granted incompatible state aid." ®