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EU judges have stood by a court ruling that overturned a European Commission order to Amazon to pay back €250mn in taxes to Luxembourg, in a further blow to efforts from Brussels to crack down on favourable tax deals.
The ruling on Thursday from the European Court of Justice is final and cannot be appealed. The decision, which ends a case that has been running since 2017, confirms that given by the General Court, the bloc’s second highest, in May 2021 that said the EU had failed to demonstrate that Amazon had benefited from state aid.
“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,” the court said in a statement.
Thursday’s action comes after an adviser to Europe’s top court said in June that the tech giant should not pay the millions back in taxes to Luxembourg as ordered by the EU executive because it had failed to do a proper assessment.
“The commission takes note of today’s judgment of the Court of Justice of the European Union confirming the 2021 judgment of the General Court which annulled the commission’s 2017 decision,” the commission said on Thursday.
“In its decision, the commission had concluded that Luxembourg had granted selective tax advantages to Amazon constituting illegal state aids,” it added. “The commission will carefully study the judgment and assess its implications.”
Amazon welcomed the ruling, saying that it confirmed that it had “followed all applicable laws and received no special treatment”.
The EU court’s final say on the case comes days into the return of Margrethe Vestager, the EU’s executive vice-president in charge of competition and digital policy, from unpaid leave when she had campaigned unsuccessfully to take over as president of the European Investment Bank.
Despite several defeats on the use of state aid law to clamp down on allegedly unfair tax arrangements, Vestager has pointed to the backing of the court in some instances on the principle that national taxation laws have to be in line with EU state aid rules.
Last month Apple was dealt a blow in its €14.3bn tax dispute with EU officials after an adviser to the ECJ said an earlier ruling over its affairs in Ireland should be scrapped.
Oxfam, the anti-poverty campaign charity, said on Thursday that the Amazon judgment was the latest evidence as to why real tax reform was needed.
“Amazon got an early Christmas present this year, as the company dodged its decade-old tax bill to Luxembourg and can continue to till this day,” said Chiara Putaturo, Oxfam EU tax expert. “This is why the EU must come forward with real tax reforms.”
