On Wednesday 12 May 2021, Amazon won a court battle against the European Commission over claims that the US technology company had received €250 million in illegal state aid tax benefits from Luxembourg.
In 2017, the European Commission ordered Amazon to pay €250 million in back taxes to the Grand Duchy. The Commission argued that Luxembourg had granted illegal state aid to Amazon subsidiary LuxOpCo between 2006 and 2014. Both the Amazon and Luxembourg's authorities contested the tax ruling.
On Wednesday, however, the Luxembourg-based General Court of the European Union (EU) annulled the Commission's decision, on the basis that there was insufficient evidence that Luxembourg had given the European subsidiary a "selective advantage". The General Court also described the Commission's analysis of the as "incorrect in several respects".
In a seperate but similar case on Wednesday, French electric utility company Engie lost its appeal in the General Court against a 2018 European Commission order to pay back €120 million in taxes to Luxembourg. The General Court sided with the Commission, finding that the company had indeed benefited from a tax advantage.
In response to these rulings, Luxembourg's Ministry of Finance issued a statement in which it said that the country "welcome[d] the judgement of the General Court of the European Union in the Amazon EU SARL case, which confirms that the tax treatment of the taxpayer in question under the tax rules applicable at the time does not constitute state aid". Regarding the Engie case, the Finance Ministry said that Luxembourg "takes note" and "will examine the judgement with all due diligence".
The Ministry added that these rulings "do not call into question Luxembourg's commitment to transparency in tax matters and the fight against tax avoidance practices", concluding that Luxembourg will "continue to participate actively and constructively in the ongoing discussions on international corporate tax reform, with the aim of ensuring a level playing field".
Amazon has also released a statement in which it welcomed the General Court's decision. The technology company said that it was "committed to Europe and follow the law in every jurisdiction in which we operate", adding that it had "invested €78 billion since 2010 and ha[s] 60 fulfilment centres, 100 corporate offices and development centres, and employ[s] over 135,000 people in a wide variety of well-paid roles [in Europe]".
Commenting on behalf of the European Commission, Executive Vice-President Margrethe Vestager said in a statement that: "All companies should pay their fair share of tax". She continued: "Both judgements confirm once more a key principle: while Member States have exclusive competence to determine their taxation laws, they must do so in respect of EU law, including State aid rules".
Regarding the Amazon ruling, the Executive Vice-President said that the Commission would "carefully study the judgement and reflect on possible next steps".