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Amazon Wins a Tax Dispute With The EU Worth $270 Million

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Amazon Wins a Tax Dispute With The EU Worth $270 Million

(CTN News) – In a recent ruling, Europe’s highest court, the European Court of Justice (ECJ), has sided with Amazon in a case brought against the company by the European Commission. The Commission had accused the U.S. e-commerce giant of benefiting from illegal tax advantages.

According to the ECJ, the Commission failed to prove that the tax agreement between Amazon and Luxembourg constituted state aid that violated the internal market regulations.

The court stated that the Commission had “not established” any wrongdoing on Amazon’s part.

In response to the ruling, Amazon expressed its satisfaction, stating that the decision confirms their adherence to all applicable laws and their receipt of no preferential treatment.

This case dates back to 2017 when the European Commission alleged that Amazon had received tax benefits in Luxembourg, where the company’s European headquarters are located.

In 2017, Luxembourg demanded that Amazon repay 250 million euros (approximately $270 million). However, Amazon decided to contest the ruling and appealed the decision.

Four years later, in 2021, a lower court in the European Union (EU) ruled in favor of Amazon, stating that the EU Commission had failed to provide sufficient evidence of an illegal tax advantage granted to the company by Luxembourg.

Unsatisfied with this outcome, the Commission took the case to the European Court of Justice (ECJ), the highest court in Europe.

Unfortunately for the Commission, the ECJ dismissed their appeal, dealing another setback to Margrethe Vestager, the EU’s competition chief.

Vestager has been actively seeking to regulate the activities of technology companies within the EU and challenge their tax practices.

This is not the first time the Commission has been involved in such a dispute. In 2016, they ordered Ireland to recover 13 billion euros in back taxes from Apple, alleging that the country had provided preferential tax treatment to the tech giant, which has its European headquarters in Ireland.

However, Apple successfully appealed this decision in 2020, halting the tax recovery process. The Commission is currently challenging this ruling, and once again, the final verdict may rest with the ECJ.

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