[BRUSSELS] The European Union ordered the world's largest online retailer Amazon on Wednesday to pay back about 250 million euros (S$400.07 million) in taxes to Luxembourg, saying it had been given an unfair tax advantage from 2003.

"Luxembourg gave illegal tax benefits to Amazon. As a result, almost three quarters of Amazon's profits were not taxed," European Competition Commissioner Margrethe Vestager said in a statement.

The Commission added that the exact amount of back-payment would still need to be calculated by Luxembourg authorities.

Amazon firmly refuted that it owed any back tax to Luxembourg, objecting to an order by EU anti-trust chief Margrethe Vestager to pay a 250-million-euro tax bill.

"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," the online shopping giant said in a statement.

The 250 million euros is less than an estimate of 400 million which sources told Reuters last year that Ms Vestager had calculated at that time.

Amazon is the latest big US multinational company to be reined in by the EU competition regulator, which also told technology group Apple pay back arrears of up to 13 billion euros to Ireland.

AFP/REUTERS