The European Court of Justice (ECJ) has upheld a ruling overturning a European Commission order requiring Amazon to pay €250 million in taxes to Luxembourg. The ruling is a major setback to the European Commission’s efforts to crack down on preferential tax deals for multinational companies.
The ruling, which is final and not subject to appeal, confirms a May 2021 ruling by the General Court, the EU’s second highest court. The General Court ruled that the European Commission had not provided sufficient evidence to prove that Amazon benefited from state aid.
The case has been ongoing since 2017, when the European Commission first ordered Amazon to repay the tax. The company challenged the order in court and the case was appealed all the way to the European Court of Justice.
The European Commission argued that Luxembourg had given Amazon preferential tax treatment, allowing the company to avoid paying the taxes it was due in the EU. However, the Court ruled that the European Commission’s evidence was insufficient to support this claim.
The ruling is a blow to the European Commission’s efforts to level the playing field for multinational companies in the EU. The European Commission has been working to combat preferential tax deals because it believes they give some companies an unfair advantage.
The European Commission has also been criticized for its handling of the case. Critics say the European Commission’s investigation was flawed and did not properly evaluate the evidence.
The European Commission is currently considering its options following the ruling. It could appeal the ruling to the European Court of Justice, or it could drop the case.
The ruling is also a setback for Oxfam, the anti-poverty campaigning charity that has been calling for real tax reform in the EU. Oxfam argues that the ruling will allow companies such as Amazon to continue to avoid paying their fair share of tax.
The ruling is a reminder of the challenges the European Commission faces in its efforts to crack down on preferential tax deals. The European Commission will need to gather stronger evidence in future cases to ensure that its rulings are upheld by the courts.