Amazon will not have to pay €250m in back taxes as it wins landmark EU tax battle

Amazon will not have to pay €250 million in back taxes after winning a landmark legal battle against the European Union’s competition chief Margrethe Vestager.

Europe’s second highest court has ruled against an EU order that Amazon must pay millions in back taxes to Luxembourg, in a major blow to regulators attempting to clampdown on preferential tax deals.

In 2017, the European Commission ruled that Amazon’s choice to headquarter its European operations in Luxembourg allowed it to avoid paying taxes on almost three quarters of its profits from EU operations by channelling profits through the country.

Last week it was reported that despite raking in €44 billion across its European markets last year, Amazon paid zero corporation tax because its Luxembourg unit made a loss of €1.2 billion.

READ MORE: Amazon paid zero corporation tax on European operations last year despite record sales

According to EU General Court judges, based in Luxembourg, regulators failed to prove “to the requisite legal standard that there was an undue reduction of the tax burden of a European subsidiary of the Amazon group”.

This is a major blow to Vestager, who has been aggressively pursuing so called ‘sweetheart’ deals between multi-national corporations and EU tax havens for over five years.

Amazon said the court’s decision was “in line with our long-standing position that we followed all applicable laws”.

It added: “We’re committed to Europe and follow the law in every jurisdiction in which we operate,” Amazon said. “We have invested 78 billion euros since 2010 and have 60 fulfilment centers, 100 corporate offices and development centers, and employ over 135,000 people in a wide variety of well-paid roles.”

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