Photo by Guillaume Périgois on Unsplash
Amazon Escapes Tax Bill to Luxembourg, European Union Court Decides
December 14, 2023
In a landmark ruling, the leading court in the European Union has decided that Amazon is not required to pay €250 million ($273 million) in back taxes to Luxembourg. This verdict concludes a significant episode in the EU’s ongoing effort to tackle favorable tax arrangements for multinational corporations.
“The Court of Justice confirms that the (European) Commission has not established that the tax ruling given to Amazon by Luxembourg was state aid that was incompatible with the (EU’s) internal market.”
Court of Justice of the European Union via CNN
The Court of Justice of the European Union confirmed that the EU Commission failed to prove that the tax ruling made in Amazon’s favor by Luxembourg constituted state aid that was not compatible with the internal market of the European Union. The court’s decision is regarded as final.
Amazon responded positively to the ruling, asserting that it has always adhered to all relevant laws and did not receive any special benefits. The company expressed its eagerness to concentrate on serving its customers across Europe.
“We welcome the Court’s ruling, which confirms that Amazon followed all applicable laws and received no special treatment. We look forward to continuing to focus on delivering for our customers across Europe.”
Amazon spokesperson via CNN
However, not all responses to the decision were positive. Chiara Putaturo, Oxfam’s EU tax specialist, articulated her dissatisfaction. She painted a picture of Amazon receiving an early Christmas gift, successfully evading its long-standing tax bill to Luxembourg, and being allowed to continue this practice. Putaturo called for the EU to implement substantial tax reforms, suggesting it should stop ignoring tax havens within its borders that let corporations avoid their tax liabilities via nominal offices.
This case underlines the EU’s antitrust chief Margrethe Vestager’s uneven success in defending tax judgments against legal appeals. In another setback, French utility company Engie recently won against an EU order that mandated it to pay €120 million in back taxes to Luxembourg.
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