The European Union's top court decided that Amazon does not owe €250 million ($273 million) in back taxes to Luxembourg. This verdict marks a setback for the EU's efforts to clamp down on favorable tax deals for multinational corporations.
The Court's Decision and Amazon's Response
The Court of Justice of the European Union stated, “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,”This decision is final and concludes a long-standing legal battle over Amazon's tax practices in Europe.
Reacting to the ruling, an Amazon spokesperson expressed satisfaction, stating, “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,”
Criticism and the Larger Context of EU Tax Policies
The decision, however, has not been without its critics.
Chiara Putaturo, Oxfam’s EU tax expert, criticized the ruling, likening it to “an early Christmas present” for Amazon. She highlighted the need for substantive tax reforms within the EU, particularly focusing on tax havens and the ability of companies to avoid taxes through legal loopholes.
“Amazon got an early Christmas present this year, as the company dodged its decade-old tax bill to Luxembourg and can continue to do so,” she said.This case is part of a broader narrative involving the EU's antitrust chief, Margrethe Vestager, and her mixed success in enforcing tax decisions against major companies.
The ruling follows a similar pattern to an earlier case this month, where French utility Engie won its legal battle against an EU order to pay €120 million in back taxes to Luxembourg. The Amazon verdict underscores the ongoing challenges faced by the EU in its endeavor to enforce fair tax practices among multinational corporations.
It also highlights the complex interplay between national tax laws, EU regulations, and the operations of global companies.