Amazon has secured a major legal victory on Wednesday after the second-highest court in Europe annulled a 2017 order by the European Union (EU) to make the company pay about €250 million ($303.28 million) in back taxes to Luxembourg, making it the latest of EU tax decisions to be overturned.
Amazon’s victory comes after the EU had lost a lawsuit against Apple last year in the same court.
EU has been cracking down on tech giants, and Amazon’s win is a big setback for European Competition Commissioner Margrethe Vestager, who has aggressively used EU’s state aid rules to tackle tax deals between multinationals corporations and EU countries. Both Apple and Amazon were targeted by Vestager, who has been leading a campaign against tech giants from the US. Vestager had alleged that EU nations such as Luxembourg, Ireland, and the Netherlands indulged in unfair treatment to attract behemoths like Amazon and Apple. It was Vestager who successfully made Ireland, Luxembourg, the Netherlands, and Belgium change their tax ruling practices.
The Luxembourg-based General Court mentioned that e-commerce giant Amazon had enjoyed no special advantage in its tax deal with Luxembourg.
“The Commission did not prove to the requisite legal standard that there was an undue reduction of the tax burden of a European subsidiary of the Amazon group,” the judge said.
According to Chiara Putaturo, a tax expert with Oxfam EU, Amazon’s victory shows again that case-by-case investigations do not solve large-scale tax dodging, and shows the urgent need for the EU to do more to end corporate tax avoidance and bolster government coffers to help fuel the recovery.
According to Amazon, the decision by the court was “in line with our long-standing position that we followed all applicable laws” and that the company “received no special treatment.”
“We’re committed to Europe and follow the law in every jurisdiction in which we operate,” Amazon said in a statement. “We have invested 78 billion euros since 2010 and have 60 fulfillment centers, 100 corporate offices, and development centers, and employ over 135,000 people in a wide variety of well-paid roles.”
According to the court, regulators from the EU failed to prove that Amazon had been given an advantage by Luxembourg’s tax policies, and said that the EU’s methods were calculating the advantage is had been “incorrect in several respects.” The EU had earlier accused Luxembourg of handing tax privileges to the Amazon that amounted to illegal state aid.
