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An EU court overturned a European Commission ruling in 2017 that required Amazon to pay $ 300 million in taxes to Luxembourg.
A European Union court on Wednesday overturned a European Commission ruling, saying the tax deal between the Luxembourg government and Amazon was illegal state aid.
In 2017, the European Commission ordered Luxembourg’s online retailer to pay around 250 million euros ($ 300 million) in back taxes.
But High Court judges said the commission had not proved “that the tax burden on a European subsidiary of the Amazon group has been properly reduced to the extent necessary.”
The Commission’s decision linked Luxembourg’s tax treatment to two Amazon companies – Amazon EU and Amazon Europe Holding Technologies.
Margrethe Vestager, an EU official in charge of antitrust issues, argued at the time that Amazon had been unduly benefiting from special low tax conditions since 2003 in its small headquarters in Luxembourg.
As a result, the EU did not tax nearly three-quarters of Amazon’s profits, he said.
Both Luxembourg and Amazon filed a ruling against the EU High Court.
The EU has reached agreements to attract foreign multinationals to attract foreign multinationals in search of a place to establish their EU headquarters. The practice caused EU states to compete with each other and multinationals to play against each other.
High Court judges have sided with the Commission in several cases, but the EU’s efforts to overcome good tax deals have had recent setbacks in the Starbucks and Apple cases.
Wednesday’s ruling can be appealed to the Supreme Court of 27 countries, the Court of Justice.
The EU continues to oppose Amazon on other competition-related issues. Last year, EU regulators filed antitrust lawsuits against the e-commerce giant, alleging that Amazon used access to data from companies selling products on the platform to gain an unfair advantage over them.
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