Amazon Wins European Court Battle Over Taxes

Online retail giant Amazon (NASDAQ:AMZN) has won an appeal against the European Commission, who had ordered the U.S. company to pay back $303 million U.S. in taxes.

The European Union’s general court said that the commission, the EU’s executive arm, had failed to prove that there was an illegal tax advantage given to Amazon, whose European subsidiary is based in Luxembourg.

The European Commission had said in 2017 that Luxembourg had granted undue tax benefits to Amazon. The commission said at the time that Amazon was allowed to pay four times less tax than other local companies subject to the same rules. However, Amazon contested that assessment.

The European Commission can decide to appeal the court ruling and take the case to the European Union’s highest court. The latest court ruling is the second one in the space of less than a year, where the outcome says the commission has not proven any tax advantage.

In July 2020, the European Union’s general court said that the commission failed to prove that the Irish government had given a tax advantage to Apple (NASDAQ:AAPL). The commission had ordered Apple to also repay some unpaid taxes.

The European Commission has since decided to take the Apple case to the European Court of Justice, while at the same time studying ways to combat what it describes as unfair market competition.