[Annotated] After a bite of Apple, Margrethe Vestager targets another tech giant

Luxembourg's "comfort letter^[각주:1]" to Amazon was illegal, says the EU

Margrethe Vestager's assault on^[각주:2] technology firms she deems to^[각주:3] have improperly^[각주:4] massaged down their^[각주:5] tax bills^[각주:6] continued this week with a tilt at^[각주:7] Amazon. The internet retailer^[각주:8] faces a bill of €250m ($293m) for back taxes over what^[각주:9] the European Union's competition commissioner^[각주:10] considers to have been an illegal sweetheart deal with^[각주:11] Luxembourg. 

The order requiring the Grand Duchy^[각주:12] to recover the money follows^[각주:13] a well-publicized^[각주:14] three-year investigation. It is the latest in a series of tax-avoidance^[각주:15] cases brought by the European Commission against multinationals^[각주:16], most of them American. Last year, Ireland was ordered to recover^[각주:17] €13bn from Apple - smashing all past records for^[각주:18] EU corporate-tax cases^[각주:19]. 

As with Apple, the commission concluded that Amazon received illegal state aid^[각주:20] - in the retailer's case between 2006 and 2014 - through a tax-cutting^[각주:21] arrangement that^[각주:22] was unavailable to its rivals. This came in the form of a ruling from^[각주:23] Luxembourg's tax authority, known as a "comfort letter".

Amazon accordingly moved intellectual property of various types into a Luxembourg partnership that served as an intermediary between Amazon's European operations - whose headquarters was^[각주:24] a separate Luxembourg entity^[각주:25] - and its American parent. As a partnership, the go-between^[각주:26] was not subject to tax under^[각주:27] Luxembourg law (the statutory^[각주:28] corporate rate is 29.22%). The European operating company^[각주:29] was.

The operating company was required to pay to the partnership substantial^[각주:30] royalties for, among other things, the right to use the Amazon name, thereby^[각주:31] shifting^[각주:32] lots of profit to the untaxed^[각주:33] entity. The commission argues that the level of royalty payments^[각주:34] was inflated^[각주:35] and did not reflect economic reality^[각주:36]. It says the arrangement allowed Amazon to avoid tax on three-quarters of^[각주:37] all profits on its sales in the EU (which the company does not disclose^[각주:38]). 

Both Luxembourg and Amazon deny wrongdoing^[각주:39]. Luxembourg's authorities^[각주:40] have said before that Amazon chose to put its main European operations in the tiny landlocked^[각주:41] country for a variety of reasons, tax not being the main one. They have also pointed out that^[각주:42] its operations in Luxembourg are hardly empty shell companies: the company employs over 1,500 people there (though the IP-holding partnership, which no longer exists, had no employees or offices). Amazon says it did not receive special treatment^[각주:43] and is considering an appeal^[각주:44].

This week's order could stoke transatlantic^[각주:45] tensions^[각주:46]. After the Apple ruling last year, American politicians queued up to^[각주:47] echo the sentiments of^[각주:48] Tim Cook, the firm's boss, who derided^[각주:49] Ms Vestager's action as "total political crap". Many of them saw Brussels's tax probes^[각주:50] as being driven by tech-envy, not sound economics. Washington hinted at^[각주:51] retaliation^[각주:52], though nothing specific has been tabled^[각주:53]. 

The commission's critics have a point^[각주:54]. The details of the case are complex, and tax experts will disagree about the legality of the arrangements^[각주:55] under the spotlight^[각주:56], just as they did with Apple. Few would deny that the frayed^[각주:57] patchwork of^[각주:58] international corporate-tax rules^[각주:59] need reforming^[각주:60]; one proposal^[각주:61], espoused by^[각주:62] President Emmanuel Macron of France and supported by several other EU countries, would see multinationals taxed on^[각주:63] revenues in particular territories^[각주:64] instead of on profits. However, punishing a company for a 14-year-old ruling from a national government^[각주:65], happily^[각주:66] accepted by both sides at the time^[각주:67], looks harsh^[각주:68]. The uncertainty^[각주:69] it stokes may also dampen^[각주:70] foreign investors' interest in Europe.

Ms Vestager's ruling will add to^[각주:71] the discomfort^[각주:72] felt by Jean-Claude Juncker, the commission's president^[각주:73], who prime minister of Luxembourg when the tax arrangement in question^[각주:74] was hammered out^[각주:75]. Mr Juncker has been widely pilloried for^[각주:76] having run a government that sucked tax revenue from neighboring countries^[각주:77] through behind-closed-doors^[각주:78] deals with big companies. He has been on the back foot^[각주:79] since the "LuxLeaks" revelations in^[각주:80] 2014, which exposed hundreds of cushy deals with^[각주:81] multinationals. In the wake of^[각주:82] that data breach^[각주:83], Luxembourg and other EU member states agreed to^[각주:84] start systematically^[각주:85] providing each other with detailed information about such arrangements. 

American firms should brace for^[각주:86] further scrutiny of^[각주:87] past tax deals^[각주:88]. The commission is also looking into the tax affairs of^[각주:89] McDonald's and FiatChrysler in Luxembourg, and those of Starbucks in the Netherlands. The only non-American firm known to be in its sights on tax is Engie, a French utility^[각주:90]. The Apple case is likely to produce plenty more drama, too. The company and Ireland are both appealing. The commission, meanwhile^[각주:91], is taking Ireland to the European Court of Justice over^[각주:92] its failure to collect the €13bn that it has been told it is owed^[각주:93] but clearly does not want. 

1. comfort letter ; 콤포트 레터: 한 회사의 재정 상태 또는 재정적 뒷받침이 튼튼하다는 것을 확인해 주기 위한 비공식 보고서. [명사] 인수서한 [본문으로]
2. assault ; 4. [C] ~ (on/upon/against sb/sth) 맹비난, 맹공격 [본문으로]
3. deem ; [동사] (보통 진행형으로는 쓰이지 않음) (격식) (…로) 여기다[생각하다] ;; [VERB] If something is deemed to have a particular quality or to do a particular thing, it is considered to have that quality or do that thing. [본문으로]
4. improperly ; [부사] 그릇되게, 틀려서; 상스럽게; 부도덕하게; 어울리지 않게; 변칙적으로, 적절하지 않게 [본문으로]
5. massage ; 3. (못마땅함) (사실・숫자 등을 더 좋아 보이도록) 조작하다 [본문으로]
6. tax bill ; 세금 고지서, 납입 고지서 [본문으로]
7. have[run] a tilt at ; 남을 공격[비난, 논박]하다 [본문으로]
8. internet retailer ; 인터넷 소매업체 [본문으로]
9. back tax(es) ; [명사] 체납 세금. [본문으로]
10. commissioner ; (참고: High Commissioner) 1. 보통 Commissioner (위원회의) 위원 [본문으로]
11. sweetheart deal ; 1. 동의어 ;; sweetheart contract ; (미·속어) 결탁 임금 협정[협약] ((낮은 임금을 주도록 회사와 노조 간부가 결탁하는 협약)) 2. (美속어) 담합(談合). [본문으로]
12. grand duchy ; [명사] 대공국(grand duke [duchess]가 다스리던 국가) [본문으로]
13. follow ; 2. HAPPEN/DO AFTER | (시간・순서상으로) 뒤를 잇다; (결과가) 뒤따르다 [본문으로]
14. publicize ; [타동사][VN] (일반 사람들에게) 알리다, 광고[홍보]하다 [본문으로]
15. tax avoidance ; [명사] (합법적인) 절세(節稅) ;; 참고 ;; tax evasion ; (불법적인) 탈세 [본문으로]
16. multinational ; [명사] 다국적 기업 [본문으로]
17. recover ; 3. MONEY | [타동사][VN] ~ sth (from sb/sth) (손실 등을) 되찾다[만회하다] [본문으로]
18. smash records ; 기록을 깨뜨리다 [본문으로]
19. corporate tax ; [명사] =corporation tax.; 법인세 [본문으로]
20. state aid ; [미] 주정부 보조(금); 국고 보조(금) [본문으로]
21. tax cut ; 감세 [본문으로]
22. arrangement ; 3. [C , U] ~ (with sb) (to do sth) 합의, 협의 [본문으로]
23. ruling ; [명사] ~ (on sth) (특히 판사의) 결정, 판결 [본문으로]
24. headquarters ; s가 붙어 있지만 단수로 받는것을 확인 [본문으로]
25. entity ; [명사] pl. -ies (격식) 독립체 [본문으로]
26. go-between ; [C , U] 중개자 [본문으로]
27. be subject to ; ~의 대상이다, 지배를 받다, 예속되다, (법의) 적용을 받다 [본문으로]
28. statutory ; [형용사] (주로 명사 앞에 씀) 법에 명시된, 법으로 정한 [본문으로]
29. operating company ; The company that is the actual manufacturer of a product or service. The operating company is usually owned by a parent company, whose source of revenue comes from taking percentage of profits from the operating company. ;; 참고 ; holding company [본문으로]
30. substantial ; 1. (양・가치・중요성이) 상당한 [본문으로]
31. thereby ; [부사] (격식) 그렇게 함으로써, 그것 때문에 [본문으로]
32. shift ; 1. MOVE | ~ (sth) (from…) (to…) (장소를) 옮기다, 이동하다[되다]; 자세를 바꾸다 [본문으로]
33. untaxed ; [형용사] 비과세의, 면세의 [본문으로]
34. royalty payment ; 인세지불. [본문으로]
35. inflate ; 3. (가격을[이]) 올리다[오르다] ;; 참고 ; deflate, reflate [본문으로]
36. reflect ; 3. [타동사][VN] (사물의 속성・사람의 태도・감정을) 나타내다[반영하다] ;; reflect reality ; 현실을 반영하다 [본문으로]
37. three quarter(s) ; 3/4 [본문으로]
38. disclose ; 1. ~ sth (to sb) (특히 비밀이던 것을) 밝히다[폭로하다] [본문으로]
39. wrongdoing ; [U , C] (격식) 범법[부정] 행위, 비행 [본문으로]
40. authority ; 4. ORGANIZATION | [C] [주로 복수로] 당국 ;; 참고 ; local authority [본문으로]
41. landlocked ; [형용사] 육지에 둘러싸인 [본문으로]
42. point out ; (주의를 기울이도록 ~을) 지적[언급]하다 동의어 point something out (to somebody) ;; [동사] 가리키다, 지적하다; 주목하다. 동의어 direct, indicate; draw attention to. [본문으로]
43. special treatment ; 특별 대우 [본문으로]
44. appeal ; 1. [C , U] ~ (against sth) 항소(抗訴), 상고(上告) ;; 참고 ; court of appeal [본문으로]
45. transatlantic ; [명사 앞에만 씀] 1. 대서양 횡단의 2. 대서양 연안 국가들의 3. 대서양 건너편의[건너편으로부터의] [본문으로]
46. stoke ; 2. ~ sth (up) (감정을) 더 부추기다[돋우다] [본문으로]
47. queue up ; to wait or stand in a line with other people in order to get something or do something [본문으로]
48. echo ; 3. [타동사][VN] (사상・의견에) 공명하다[반향을 보이다] [본문으로]
49. deride ; [동사] (흔히 수동태로) ~ sb/sth (as sth) (격식) 조롱[조소]하다 ;; 미국·영국 [dɪ|raɪd] [본문으로]
50. probe ; 1. [특히 신문에서 쓰여] ~ (into sth) (철저한) 조사 [본문으로]
51. hint at ; …을 암시하다, …을 넌지시 비치다, 풍기다 [본문으로]
52. retaliation ; [U] ~ (against sb/sth) (for sth) 보복, 앙갚음 [본문으로]
53. table ; [vn] 1. (英) (의안 등을) 상정하다 [본문으로]
54. have a point ; [동사] 일가견을 가지고 있다, 일리 있다; 장점이 있다. ;; 동의어 ; have a worthwhile opinion, be correct [effective] in one's contention [본문으로]
55. arrangement ; 2. [C] [주로 복수로] (처리) 방식 [본문으로]
56. under[in] the spotlight ; getting attention from newspapers, television and the public [본문으로]
57. fray ; 1. (천이[을]) 해어지다[해어지게 하다] [본문으로]
58. patchwork ; 2. [sing.] (쪽모이처럼) 여러 조각[부분]들로 이뤄진 것 [본문으로]
59. rules ; (법률) 규칙 [본문으로]
60. reforming ; 개선, 개혁, 재편성 [본문으로]
61. proposal ; 1. [C , U] ~ (for sth) | ~ (to do sth) | ~ (that…) 제안, 제의 [본문으로]
62. espouse ; [타동사][VN] (격식) (주의・정책 등을) 옹호[지지]하다 ;; 미국∙영국 [ɪ|spaʊz] [본문으로]
63. tax ; [vn] 1. 세금을 부과하다, 과세하다 [본문으로]
64. territory ; 3. [C , U] (업무・활동) 구역 [본문으로]
65. national government ; [때로 N- G-] (일국의) 중앙 정부; (정당을 초월한) 거국 내각 [본문으로]
66. happily ; 3. 기꺼이 [본문으로]
67. at the time ; at a particular moment in the past; then ;; 그 당시,그 시기 [본문으로]
68. harsh ; (harsh・er , harsh・est) 1. 가혹한, 냉혹한 [본문으로]
69. uncertainty ; (pl. -ies) 1. [U] 불확실성; 반신반의 [본문으로]
70. dampen ;2. (감정・반응의 기세를) 꺾다[약화시키다] [본문으로]
71. add to ; …에 더하다[보태다]. [본문으로]
72. discomfort ; 2. [U] (심리적인) 불편 [본문으로]
73. commission president ; 위원회 위원장 [본문으로]
74. in question ; 1. 문제의[논의가 되고 있는] [본문으로]
75. hammer out ; (끝까지 논의하여) ~에 대해 타결을 보다, 머리를 짜서 생각해 내다, (토의하여 문제를) 타결하다; 강타하다. ;; 동의어 work out, get settled. [본문으로]
76. pillory ; [타동사][VN] (pil・lor・ies , pil・lory・ing , pil・lor・ied , pil・lor・ied) [흔히 수동태로] (남들이 보는 데서) 강력히 비판하다 ;; 미국∙영국 [|pɪləri] [본문으로]
77. neighboring ; [형용사] [A] 이웃의, 근처[인근]의; 인접한(adjacent) [본문으로]
78. behind closed doors ; 비공개로[비밀리에] [본문으로]
79. back foot ; [NOUN] on the back foot at a disadvantage; outmanoeuvred or outclassed by an opponent [본문으로]
80. revelation ; (참고: reveal) 1. [C] ~ (about/concerning sth) | ~ (that…) 폭로(된 사실) [본문으로]
81. cushy ; [형용사] cush・ier , cushi・est 수월한 [본문으로]
82. in the wake of ; [부사] ~에 뒤이어[~을 뒤따라], …의 뒤를 좇아, …에 뒤이어; …의 결과로서. ;; 동의어 ; following, succeeding, in the aftermath of; as a result of. [본문으로]
83. breach ; 4. [C] (방어벽 등에 생긴) 틈[구멍] [본문으로]
84. agree to ; …에 대해 합의하다. ;; to say yes; to say that you will do what somebody wants or that you will allow something to happen [본문으로]
85. systematically ; [부사] 조직적으로; 분류법에 근거하여, 질서 정연하게 [본문으로]
86. brace for ; ~에 대비하다 [본문으로]
87. scrutiny ; [U] (격식) 정밀 조사, 철저한 검토 [본문으로]
88. past ; [형용사] 3. [명사 앞에만 씀] 이전의 [본문으로]
89. tax affairs ; 국세 업무, 세무 [본문으로]
90. utility ; (pl. -ies) 1. [C] (특히 美) (수도・전기・가스 같은) 공익사업 [본문으로]
91. meanwhile ;1. (비격식 mean・time) (다른 일이 일어나고 있는) 그 동안에 [본문으로]
92. take sb to court over ; (…를) 법원에 고소하다. [본문으로]
93. owe ; [진행형으로는 쓰이지 않음] 1. ~ sth (to sb) (for sth) | ~ (sb) sth (for sth) (돈을) 빚지고 있다 [본문으로]