In a significant blow to European Union antitrust chief Margrethe Vestager’s campaign against favorable tax arrangements for multinational corporations, the Court of Justice of the European Union (CJEU) in Luxembourg ruled on Thursday that Amazon does not have to pay 250 million euros ($273 million) in back taxes to the country, reported Reuters.
“The Court of Justice confirms that the (European) Commission has not established that the tax ruling given to Amazon by Luxembourg was state aid that was incompatible with the (EU’s) internal market,” stated the Luxembourg-based CJEU, emphasizing the finality of its decision.
Amazon welcomed the decision, asserting, “We look forward to continuing to focus on delivering for our customers across Europe. The Court’s ruling confirms that Amazon followed all applicable laws and received no special treatment,” said an Amazon spokesperson.
This decision is a setback for Vestager, who has been actively pursuing cases against multinational corporations benefiting from what the EU perceives as sweetheart tax deals. The ruling highlights the challenges faced by the EU in defending its tax decisions against legal challenges.
Chiara Putaturo, Oxfam EU tax expert, expressed disappointment in the court’s decision. “Amazon got an early Christmas present this year, as the company dodged its decade-old tax bill to Luxembourg and can continue to do so,” said Putaturo. She called for the EU to enact substantial tax reforms and not turn a blind eye to tax havens within its borders that allow companies to avoid their tax obligations through the use of empty offices.
This court ruling comes on the heels of another setback for the EU in its pursuit of back taxes. Earlier this month, French utility company Engie emerged victorious in its fight against an EU order to pay 120 million euros in back taxes to Luxembourg.