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Amazon wins tax dispute with EU Commission before the European Court of Justice

In the tax dispute with Amazon, the EU Commission has suffered a defeat at the European Court of Justice (ECJ) in Luxembourg. The ECJ ruled on Thursday that the Commission had not proven that Luxembourg had granted Amazon unlawful aid. Luxembourg therefore does not have to demand additional...

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Amazon wins tax dispute with EU Commission before the European Court of Justice

In 2017, the Commission decided that Amazon should repay 250 million euros to Luxembourg. According to the Commission, the tax base had been underestimated and almost three quarters of Amazon's profits had not been taxed. Both the group and the country appealed against the decision before the General Court of the European Union, which ruled in their favor in May 2021.

It found that Luxembourg had not granted Amazon a selective advantage. It therefore annulled the Commission's decision. The Commission appealed against this to the next higher instance, the ECJ. The latter has now confirmed the judgment of the General Court.

In an initial reaction to the ECJ ruling, Oxfam tax expert Chiara Putaturo explained that it was an "early Christmas present for Amazon". If countries allowed international corporations to avoid their tax obligations, they would be teaming up with super-rich company owners and the rest would have to foot the bill.

For years,Luxembourg has been accused of tying international corporations to itself through favorable tax agreements. In advance tax rulings, the country gives corporations assurances about the tax assessment of certain circumstances, such as license fees paid abroad. In the so-called LuxLeaks scandal, whistleblowers published numerous such tax rulings at the end of 2014.

The EU Commission then announced that it would look more closely into the issue in order to ensure fair tax competition between member states. Luxembourg always rejected the accusations and emphasized that other countries were taking a similar approach.

Read also:

  1. The Commission's decision for Amazon to repay 250 million euros to Luxembourg, made in 2017, was based on the understanding that the tax base had been underestimated and nearly three quarters of its profits had evaded tax.
  2. Amazon and Luxembourg both challenged the Commission's decision before the General Court of the European Union, leading to a ruling in their favor in May 2021, which annulled the Commission's decision.
  3. The ECJ, as the next higher instance, has now upheld the General Court's judgment, which was seen as an "early Christmas present" for Amazon by Oxfam tax expert Chiara Putaturo.
  4. The European Court of Justice is the court where the Commission appealed against the General Court's ruling in the tax dispute between Amazon and Luxembourg.
  5. Although Luxembourg has been accused of offering favorable tax agreements to attract international corporations, it has consistently maintained that other countries are adopting similar approaches.
  6. The EU Commission announced in response to the LuxLeaks scandal that it would scrutinize tax practices more stringently to promote fair tax competition among member states.

Source: www.stern.de

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