A European Union court overturned a 2017 European Commission ruling requiring Amazon to pay $ 300 million in back taxes to Luxembourg.
A European Union court on Wednesday overturned a European Commission ruling that a tax deal between the Luxembourg government and Amazon constituted illegal public support.
In 2017, the European Commission ordered the US-based online retailer to pay around 250 million euros ($ 300 million) in back taxes in Luxembourg.
But the judges of the General Court declared that the Commission had not proved “to the required legal standard that there was an undue reduction in the tax burden of a European subsidiary of the Amazon group”.
The Commission’s decision concerned the tax treatment granted by Luxembourg to two companies in the Amazon group – Amazon EU and Amazon Europe Holding Technologies.
Margrethe Vestager, the EU’s head of antitrust matters, argued at the time that Amazon had unfairly taken advantage of special low-tax conditions since 2003 in little Luxembourg, where its European headquarters are based.
As a result, nearly three-quarters of Amazon’s profits in the EU were untaxed, she said.
Luxembourg and Amazon have both challenged the ruling in the EU General Court.
The EU has attacked agreements between countries and individual companies used to attract foreign multinationals looking for a place to establish their headquarters in the EU. This practice led EU states to compete with each other and multinationals played them against each other.
General Court judges have backed the Commission in several cases, but EU efforts to crack down on favorable tax deals have recently suffered setbacks in cases involving Starbucks and Apple.
Wednesday’s decision can be appealed to the highest court in the 27-nation bloc, the Court of Justice.
The EU remains at odds with Amazon on other competition-related issues. Last year, EU regulators filed antitrust charges against the e-commerce giant, accusing Amazon of using its access to data from companies that sell products on its platform to gain an unfair advantage over they.
