European Union regulators sent a warning to any company using fees on intellectual property rights to shift profits away from the taxman—slapping Amazon.com Inc. with a 250 million-euro ($294 million) bill and giving Luxembourg another rap on the knuckles.

The EU took a dim view of a structure that allowed Amazon to slash its taxable profits in Europe over about a decade by channeling them to a tax-free unit located in Luxembourg that was meant to license the technology behind its web shopping platform.

Officials found one big problem with the arrangement: The unit was just a shell company, how could it therefore perform complex duties such as licensing and managing intellectual property? Impossible, according to the EU. Both Amazon, which is a major employer in Luxembourg, and the country's government deny they broke any rules.