Amazon faces EU tax avoidance investigation

The European Commission will conduct a formal investigation into American online retailer's European tax practices, according to BBC News.

The 28-member EU will specifically look at a tax agreement made between Amazon and Luxembourg. The EU alleges the deal amounts to state aid and a distortion of competition.

While Amazon says it received no special tax treatment, the EU claims Amazon's European profits "are recorded in Luxembourg but are not taxed in Luxembourg," said EU competition commissioner Joaquin Almunia.

Read more from BBC News.