BRUSSELS, Belgium: In a setback to the campaign of the head of competition, Margrethe Vestager, against preferential agreements, Amazon won its fight against an EU order to pay about $ 303 million in post-Luxembourg taxes.
The bloc failed to show that Luxembourg had given the US online retailer special treatment in violation of state aid rules, the EU General Court ruled on 12 May.
The ruling comes after Vestager’s major defeat against Apple last year, which had challenged an order to pay $ 15 billion in Irish back taxes.
Both Amazon and Apple were Vestager’s targets in a crusade to eliminate the tax deals used by EU states, including Luxembourg and the Netherlands, to attract large companies.
“The Commission did not prove with the necessary legal rule that there was an undue reduction in the tax burden of a European subsidiary of the Amazon group,” said EU judges based in Luxembourg.
Amazon, in a statement, welcomed the ruling, saying it was in line with “our long-standing position that we follow all applicable laws and that Amazon did not receive any special treatment.”
Vestager said he will review the sentence before deciding whether to appeal to the European top court.
However, Vestager is unlikely to stop his campaign, said Ioannis Kokkoris, a professor of competition law and economics at Queen Mary University in London based in London.
On Wednesday, in a separate case, French utilities Engie lost its appeal against an EU order to return € 120 million in taxes to Luxembourg, but the focus was on the decision of Amazon, which was criticized by groups campaigning for higher taxes. multinationals.
“Today’s ruling is a severe blow,” said Chiara Putaturo, a tax expert at Oxfam EU. “It once again demonstrates that case-by-case investigations do not solve large-scale tax evasion.”
Like Oxfam, EU lawmakers said a systematic approach was needed and urged the bloc to support US President Joe Biden’s request to impose a minimum tax rate of 21% on multinationals.
“This minimum tax rate would allow member states to recover Amazon’s lost tax revenue in the future. This would put an end to Luxembourg’s business model as a tax haven,” said MEP Sven Giegold.
“At the same time, country-by-country public reports should be introduced as soon as possible. Then large companies will have to disclose their profits and taxes paid by country,” Giegold said.
Vestager’s success in getting Belgium, Ireland, Luxembourg and the Netherlands to change their tax practices has helped drive efforts to reach a global agreement.
In its 2017 ruling, which was overturned on Wednesday, the European Commission said Luxembourg saved Amazon from paying taxes on nearly three-quarters of its profits from EU operations, as it allows it to channel tax-free profits to a holding company.