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Amazon does not have to pay back 250 million euros in tax aid

Amazon surprises (positively) analysts with its Q2 2022 results

Amazon wins in court. He Court of Justice of the European Union (ECJ) has endorsed Luxembourg’s tax aid for Amazon, the company founded by Jeff Bezos will not have to pay back the 250 million euros that the European Commission asked it to pay for consideration as “illegal» Tax assistance.

The Supreme Community Court confirmed this in a judgment delivered on Thursday, as it had already stated Court (TGUE), The European Commission’s original decision to force Luxembourg to recover aid granted to Amazon had to be annulled, but on the basis of different criteria. «The Commission was unable to demonstrate that the tax scheme granted to Amazon by Luxembourg (tax ruling) constituted state aid incompatible with the internal market“The ECJ stated in a statement.

In 2017, Brussels found that the tax advantages of around 250 million euros that Amazon had benefited from in Luxembourg violated EU law because, in its opinion, the company had been solvent for several years.significantly less taxes without any apparent justification«. Specific, Brussels claimed that Amazon had been able to benefit from a tax regime for eight years (from 2006 to 2014), which allowed him to save taxes on “almost three quarters of the profit» gained through sales in the EU. Both Amazon and the Luxembourg government challenged the decision the Commission before the Court of Justice.

In 2021, the Court found that the Commission had not established to the requisite legal standard that the Amazon group subsidiary in question had benefited from an unjustified reduction in its tax burden. In his opinion, Luxembourg did not grant this subsidiary any selective advantage, therefore annulled the Commission’s decision.

The ECJ considers that the Commission was wrong

In his judgment today The ECJ rejects the appeal lodged by the Commissionsince he is of the opinion that “incorrectly recognized the general applicability of the arm’s length principleThe aim is to assess, within the framework of the application of Union state aid rules, whether intra-group transactions are carried out in accordance with market conditions«.

In fact, they qualified,”Since this principle has no independent existence in Union law, the Commission can only rely on it if it is incorporated into the relevant national tax law, in this case Luxembourg tax law.«. Likewise, in contrast to the court’s statements, it says: “the guidelines of the Organization for Economic Cooperation and Development (OECD) in connection with these transactions could only have been relevant to the case if Luxembourg tax law had expressly referred to it«.

The Court deduces this from this The Commission has statedwrongly» the reference system, first phase of analysis in order to classify a national measure as state aid. «The Court confirms the contested judgment: The commission’s decision had to be overturnedat least because of this incorrect definition of the reference system and not because of the reasons given by the court«, concludes the ECJ, whose judgment is binding.

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