Amazon Prevails in $270 Million Tax Dispute, Dealing Blow to EU’s Vestager

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Europe’s top court, the Court of Justice of the European Union (CJEU), ruled on Thursday that Amazon (NASDAQ:AMZN) is not obligated to pay €250 million ($273 million) in back taxes to Luxembourg. This decision represents a setback for Margrethe Vestager, the European Union’s antitrust chief, in her efforts to challenge favorable tax arrangements for multinational corporations.

The Court of Justice of the European Union (CJEU), headquartered in Luxembourg, affirmed that the (European) Commission did not prove that Luxembourg’s tax ruling for Amazon constituted state aid incompatible with the (EU’s) internal market. This ruling is conclusive. A spokesperson for Amazon expressed satisfaction with the decision, stating, “We appreciate the Court’s verdict, confirming that Amazon adhered to all relevant laws, received no preferential treatment, and eagerly anticipate our ongoing commitment to serving customers throughout Europe.”

However, Chiara Putaturo, Oxfam EU tax expert, criticized the ruling, describing it as an “early Christmas present” for Amazon. She expressed concern about the company avoiding its decade-old tax bill to Luxembourg and urged the EU to implement real tax reforms, emphasizing the need to address tax havens within its borders.

The court’s decision highlights the challenges faced by Vestager in defending tax decisions against legal challenges. Earlier in the month, French utility Engie won its legal battle against an EU order requiring it to pay €120 million in back taxes to Luxembourg.

The case in question is labeled C-457/21 P Commission v and Others.

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