Amazon wins $303 million court fight in blow to EU tax crusade

Reuters

May 12: Amazon won its fight against an EU order to pay about 250 million euros ($303 million) in back taxes to Luxembourg in another blow to competition chief Margrethe Vestager’s crusade against preferential deals.

The bloc failed to show that Luxembourg had given the U.S. online retailer special treatment in violation of state-aid rules, the EU’s General Court ruled on Wednesday.

The victory follows last year’s landmark defeat for Vestager against Apple, which had contested an order that it pay 13 billion euros ($15 billion) in Irish back taxes.

Both Amazon and Apple were targeted by Vestager in a campaign to stamp out tax deals used by EU states such as Ireland, Luxembourg and the Netherlands to attract large companies. The Commission views such agreements as unfair.

“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 Luxembourg-based EU judges said.

Amazon in a statement welcomed the ruling, saying it was in line with its “long-standing position that we followed all applicable laws and that Amazon received no special treatment”.

Vestager said she would examine the ruling before deciding whether to appeal to Europe’s top court.

It wasn’t all bad news for Vestager. In a separate case on Wednesday, French utility Engie lost its appeal against an EU order to pay back taxes of 120 million euros to Luxembourg.

But the spotlight was on the Amazon decision, which was criticised by groups campaigning for higher taxes to be levied on multinationals.

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