Europe’s top court ruled today that Amazon does not have to pay €250 million in back taxes to Luxembourg, marking a defeat for EU competition chief Margrethe Vestager’s campaign on tax deals favorable to multinationals.
“The Court of Justice confirms that the (European) Commission has not proven that the tax ruling issued by Luxembourg regarding Amazon amounted to state aid incompatible with the (EU) internal market,” the Luxembourg-based Court of Justice of the European Union said. The European Court of Justice said.
Her decision is final.
An Amazon spokesperson said: “We welcome the court’s ruling, which confirms that Amazon followed all applicable laws and did not receive any special treatment. We look forward to continuing to focus on providing services to our customers across Europe.”
Chiara Butatoro, a tax expert at Oxfam in the European Union, criticized the decision.
“Amazon got an early Christmas present this year as the company dodged its tax bill on Luxembourg a decade ago, and it can continue to do so,” Butatoro said.
She added: “This is why the EU must move forward with real tax reforms. It can start by not looking the other way when it comes to tax havens within its borders, allowing companies to avoid their tax bills with empty offices.”
The EU’s defeat in court highlights Vestager’s mixed record on defending tax decisions against legal challenges.
Earlier this month, French utility Engie won its battle against an EU order to pay €120 million in back taxes to Luxembourg.
Meanwhile, in November, the Advocate General of the EU Supreme Court proposed that the court overturn the lower General Court’s ruling in the Apple tax case and return it to the General Court for a new decision.
The opinion follows an appeal by the committee after the General Court three years ago overturned the committee’s finding that the tech giant had underpaid a total of €13.1 billion in taxes owed to Ireland between 2003 and 2014.
The legal opinion of the Public Protector is not binding, but in most cases it is later reflected in the court’s final ruling.