Amazon's tax deal with Luxembourg may breach state aid rules, according to the findings of a preliminary investigation by the EU.
The inquiry was launched in October amid accusations the arrangement with the online retailer in 2003 allowed it to channel profits through the country in return for low tax rates, thus avoiding higher rates of tax in the EU nations where the profits were achieved - including Britain.
The probe has sparked searching questions of EU Commission president Jean Claude Juncker, who may be asked what he knew of the arrangements struck during his 19 years as prime minister of Luxembourg.
The EU's competition regulators said: "The Commission's preliminary view is that the tax ruling ... by Luxembourg in favour of Amazon constitutes state aid."
Amazon told Sky News that it has received "no special tax treatment from Luxembourg".
"We are subject to the same tax laws as other companies operating here," the statement said.
Luxembourg, which is facing a separate competition probe on its dealings with Fiat, is not the only EU nation feeling the heat on its tax dealings with multi-national firms.
Starbucks' relationship with the Netherlands and Ireland's arrangement with Apple are also being scrutinised.
Amazon is among global firms to have faced fierce criticism in the UK over its tax contribution.
In May 2014, it was revealed Amazon paid a UK corporation tax bill of £10m in its last financial year, despite sales in the country of £4.3bn.
Amazon.co.uk reported a 56% rise in profit to £17m in 2013.
Its statement to Sky News at the time of the publication of the results said it paid all applicable taxes in jurisdictions that it operates in.
It said: "Amazon EU serves tens of millions of customers and sellers throughout Europe from multiple consumer websites in a number of languages dispatching products to all 28 countries in the EU.
"We have a single European headquarters in Luxembourg with hundreds of employees to manage this complex operation."
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