Amazon wins a €250m court battle with EU

Photo: AP

The Luxembourg-based General Court scrapped an EU order aimed to make the e-commerce giant Amazon pay some 250 million euros in back taxes to Luxembourg, Reuters reported. "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 judge said.

Amazon's win is a serious blow over the ambitions of EU Competition Commissioner Margrethe Vestager who targeted tech giants over unfair deals with EU member states. “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,” the online retailer said in a statement. “We’re pleased that the Court has made this clear, and we can continue to focus on delivering for our customers across Europe.”

Amazon’s tax deal with Luxembourg, the base for the retailer’s European operations, allowed the company to cut its taxable profits “to a quarter of what they were in reality,” the European Commission decided in 2017. Amazon’s European retail business paid no corporate tax in Luxembourg last year, reporting a 1.2 billion euro loss which exempted it from corporate tax on revenue of 44 billion euros, the New York Times said this month.

Vestager has a mixed record so far. The biggest setback was last year when the General Court threw out her order to iPhone maker Apple to pay 13 billion euros in Irish back taxes. The same court in 2019 rejected her order to Starbucks to pay up to 30 million euros in Dutch back taxes and also overturned an order demanding Belgium revoke a tax break that benefited 39 multinationals including BP and BASF. Vestager has successfully made Ireland, Luxembourg, the Netherlands and Belgium change their tax ruling practices, and spurred the Organisation for Economic Cooperation and Development (OECD) to aim for a global deal on how multinational companies are taxed.

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