Amazon Triumphs in EU Court, Escapes €250 Million Tax Bill

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In a significant victory for the e-commerce giant, Amazon has been exempted from paying approximately 250 million euros ($273 million) in back taxes after the European Union (EU) judges ruled in its favor on Thursday. This decision marks a setback for the 27-nation bloc's efforts to combat corporate tax avoidance.

Court Ruling Ends Long-Running Legal Battle

The ruling by the EU's top court is final, putting an end to the protracted legal battle over tax arrangements between Amazon and the government of Luxembourg. It also represents a further setback for Margrethe Vestager, the EU's antitrust chief, who has been leading a crackdown on such practices.

Amazon's Tax Arrangements Deemed Legal

The Court of Justice backed a 2021 decision by judges in a lower court who sided with Amazon. The court found that the European Commission, the EU's executive branch, failed to prove its case that Amazon received illegal state support. In a press release, the court stated, "The Court of Justice confirms that the Commission has not established that the tax ruling given to Amazon by Luxembourg was a State aid that was incompatible with the internal market" of the EU.

Amazon Welcomes the Ruling

Amazon welcomed the ruling, emphasizing that it confirms the company's compliance with all applicable laws and its receipt of no special treatment. In a statement, the company expressed its intention to continue focusing on delivering for its customers across Europe.

EU Commission to Study the Judgment

The European Commission responded to the ruling by stating that it will carefully study the judgment and assess its implications. The case dates back to 2017 when Vestager accused Amazon of unfairly benefiting from exceptionally low tax conditions in Luxembourg since 2003. As a result, nearly three-quarters of Amazon's profits in the EU went untaxed, according to Vestager.

EU's Focus on Tax Deals

The EU has been targeting deals between individual countries and companies that aim to attract foreign multinationals seeking to establish their EU headquarters. This practice has led to competition among EU states and multinationals exploiting these rivalries to their advantage.