EU court rejects brussels' appeal in Amazon tax case

The top EU court dismissed Brussels’ appeal on Thursday against a prior ruling that thwarted its attempts to compel Luxembourg to recover 25 million euros ($272 million) in back taxes from Amazon. The court’s final decision dealt a blow not only to the European Commission but also to EU Competition Commissioner Margrethe Vestager.

“The Court of Justice confirms that the Commission has not established that the tax ruling given to Amazon by Luxembourg was a State aid that was incompatible with the internal market,” stated the court, delivering the conclusive judgment. “In its judgment handed down today, the Court of Justice rejects the appeal brought by the Commission,” it added.

Amazon welcomed the ruling, while critics, including Oxfam, denounced the decision. Oxfam’s EU tax expert, Chiara Putaturo, called for “real” tax reforms and urged the EU to address tax havens within its borders.

The case, initiated by Vestager in 2017, alleged that Luxembourg provided illegal state aid to Amazon through tax privileges. However, in May 2021, the EU General Court found no evidence of “selective advantage” given to the tech giant. Despite the setback, the European Commission appealed in July 2021 to the highest legal body of the European Union.

Vestager, recently returning to her commissioner role, faced disappointment in her bid for the European Investment Bank (EIB) position, which was ultimately filled by Spanish Economy Minister Nadia Calvino.

This ruling adds to the EU’s challenges in defending tax decisions, as seen in previous losses against Apple and Starbucks. While the battle with Apple continues, the ECJ’s top legal advisor recommended reconsidering a previous victory for Apple against Brussels in a 13-billion-euro tax case. A final decision by the ECJ is expected in the coming months, with judges not bound by the advisor’s opinion.