Amazon wins tax appeal against the EU

In 2017, the European Commission said Luxembourg had given undue tax benefits to Amazon

Amazon has won its appeal against the European Commission after it had ordered the US tech giant to pay back €250m ($303m, $427m) in taxes to Luxembourg, where the company has its European subsidiary.

The EU’s General Court said that the commission was not able to prove that there was an illegal tax advantage given to Amazon by Luxembourg.

In 2017, the European Commission said that Luxembourg had given undue tax benefits to Amazon. The commission said at the time that Amazon was allowed to pay four times less tax than other local companies. Amazon challenged that assessment.

A welcome decision

“We welcome the court’s decision, which is in line with our long-standing position that we followed all applicable laws and that Amazon received no special treatment,” said Amazon in an email to CNBC.

The commission can decide to appeal the General Court ruling and take the matter to the EU’s highest court, the European Court of Justice (ECJ).

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Not the first EU defeat

This is not the first court ruling where the outcome has not favoured the commission. In July, the General Court said that the EU’s team led by Margrethe Vestager failed to prove that the Irish government had given a tax benefit to Apple. 

The commission had ordered Apple to repay around €13bn in unpaid taxes in 2016. Since the July ruling, the commission has decided to take this case to the ECJ.

European lawmakers are currently debating two legislative proposals that could bring about changes. The EU aims to enforce solutions that will lead to practical changes, rather than fining those that constantly breach the rules.

Further reading: Amazon invests $1bn in climate and social sustainability

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