Amazon has won a major court fight against a European Commission order that it pay 250 million euros ($303 million) in back taxes to Luxembourg deemed “illegal state aid.”
The ruling from Europe’s general court is the latest blow to the EU’s fight against “sweetheart deals” that allegedly allow big multinational tech companies to avoid hundreds of millions of euros in tax in other member states.
What is the case?
The case dates back to 2014, European Commission investigation into Amazon’s tax arrangement in Luxembourg, which ultimately concluding that the country had granted undue tax benefits of around 250 million euros.
EU competition commissioner Margrethe Vestager said the deal was illegal under EU rules because Amazon was allowed to pay substantially less tax than other businesses. She ordered Luxembourg to recover the money.
Margrethe Vestager, the European competition commissioner, said
“Luxembourg gave illegal tax benefits to Amazon. As a result, almost three-quarters of Amazon’s profits were not taxed.
“In other words, Amazon was allowed to pay four times less tax than other local companies subject to the same national tax rules. This is illegal under EU state aid rules. Member states cannot give selective tax benefits to multinational groups that are not available to others.”
“The commission did not prove to the requisite legal standard as was not enough evidence to prove that Amazon had been awarded a special tax deal by Luxembourg.”
” We welcomed the decision, and said it had a “longstanding position that we followed all applicable laws and that Amazon received no special treatment”.
“Also, we’re pleased that the court has made this clear, and we can continue to focus on delivering for our customers across Europe.”
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