Janice R. Andrews
Amazon has successfully concluded a long-standing legal battle with the European Commission over €250 million ($263 million) in alleged back taxes. On Wednesday, the Commission announced the closure of its state aid investigation into the tech giant, officially ending the case.
The dispute began in 2017 when the Commission accused Amazon of using a Luxembourg-based shell company from 2006 to 2014 to reduce its tax liability significantly. The arrangement allegedly allowed Amazon to avoid taxes on 75% of its EU profits during that period.
In 2021, Amazon won an appeal against the Commission’s decision. The EU’s General Court found no evidence that Amazon’s tax structure gave it an unfair advantage over competitors, citing “methodological errors” in the Commission’s findings. The court ruled that Amazon’s practices adhered to international tax laws, leading to the annulment of the initial decision.
After considering the court’s guidance, the Commission opted to close the case this week. An Amazon spokesperson welcomed the decision, reiterating the company’s compliance with all applicable tax laws.
While this outcome marks a setback for the European Commission, it has seen recent success in other high-profile cases. In September 2024, Europe’s highest court upheld a ruling against Apple, requiring the company to repay €13 billion ($14.4 billion) in illegal tax benefits obtained from Ireland in 2016.
This resolution allows Amazon to focus on its European operations without the shadow of legal uncertainty. However, it also highlights the ongoing challenges EU regulators face in addressing corporate tax practices. Efforts to harmonize tax laws and curb profit-shifting strategies remain a priority for policymakers as they aim to ensure fair competition and transparency across the bloc.
