EU justices rule in favor of Amazon on tax policy

LONDON — Amazon won’t have to pay about $273 million in back taxes after European Union judges ruled in favor of the U.S. e-commerce giant Thursday, dealing a defeat to the 27-nation bloc in its efforts to tackle corporate tax avoidance.

The ruling by the EU’s top court is final, ending the long-running legal battle over tax arrangements between Amazon and Luxembourg’s government and marking a further setback for a crackdown by antitrust chief Margrethe Vestager.

The Court of Justice backed a 2021 decision by judges in a lower court who sided with Amazon, saying the European Commission, the EU’s executive branch, had not proved its case that Amazon received illegal state support.

“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” of the EU, the court said in a news release.

Amazon welcomed the ruling, saying it confirms that the company “followed all applicable laws and received no special treatment.”

The case dates to 2017, when Vestager charged Amazon with unfairly profiting from special low tax conditions since 2003 in tiny Luxembourg, where its European headquarters are based.

As a result, almost three-quarters of Amazon’s profits in the EU were not taxed, she said.

The EU has taken aim at deals between individual countries and companies used to lure foreign multinationals in search of a place to establish their EU headquarters.

The practice led to EU states competing with each other and multinationals playing them off one another.