EU fails to nail Amazon on tax
LUXEMBOURG DEAL ‘WAS NOT UNFAIR’
ONLINE giant Amazon yesterday won a fight against an EU demand ordering it to pay more than £210million in back taxes.
The decision by Europe’s second highest court dealt a blow to the EU’s crackdown on alleged unfair tax deals for multinationals.
The General Court ruled Amazon had not enjoyed a “sweetheart” tax deal with Luxembourg.
It comes four years after the European Commission said an arrangement between Amazon and the country in 2003 amounted to illegal state aid.
Amazon has been accused of shifting the vast majority of profits from its European arm through Luxembourg, known for its low tax rates.
It recently emerged that Amazon’s European business paid no corporation tax last year, despite achieving record sales of £38billion. A judge at the General Court ruled yesterday: “The Commission did not prove to the requisite legal standard that there was an undue reduction of the tax burden of a European subsidiary of the Amazon group.” EU Competition Commissioner Margrethe Vestager has aggressively used the bloc’s state aid rules to tackle what it believes are sweetheart tax deals. Amazon said the court’s decision “is in line with our position that we followed all applicable laws and that Amazon received no special treatment”. Paul Monaghan, chief executive of the Fair Tax Foundation, said: “The European Commission is to be applauded for pursuing Luxembourg and Amazon for what is to most people’s eyes the enablement of rampant tax dodging. “However, chasing this down via the charge of ‘illegal state aid’ is fraught.” He called instead for a reform of international tax rules.