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Amazon Spared From $390m European Tax Hit

The EU General Court has handed Amazon a win over a 250-million-euro ($390.7 million AUD) tax bill, dealing a setback to the European Commission.

The court overturned a 2017 decision by the Commission that Luxembourg had granted illegal state aid to Amazon in the form of significant tax breaks to attract the company’s investment, ruling that Amazon did not have to pay the bill the EC imposed.

The Luxembourg-based judges ruled that the EC “did not prove to the requisite legal standard that there was an undue reduction of the tax burden of a European subsidiary of the Amazon group,” Bloomberg reports.

Margrethe Vestager, European Commission.

The EC’s Executive Vice-President Margrethe Vestager said the Commission would examine its next steps following the ruling.

“All companies should pay their fair share of tax. Tax advantages given only to selected multinational companies harm fair competition in the EU.

“They also deprive the public purse and European citizens of funds for much needed investments to recover from the coronavirus crisis and seize the twin transitions,” she said.

The court case is another blow to Vestager’s fight against multinational tax avoidance, following a judgment last year against a massive 13-billion-euro tax order imposed on Apple.

Vestager did chalk up one victory, however, with French multinational energy company Engie ordered to cough up 120 million euros ($187 million AUD) in tax to Luxembourg.

Both the Amazon and Engie decisions can be appealed.

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