The European Commission ends the state aid case against Amazon without the payment of taxes
Amazon will not have to pay the European Union €250 million ($263 million) in back taxes. On Wednesday, the bloc’s top branch said it was closing three state aid investigations, including one involving Amazon. This decision puts an end to one of the legal problems that have been going on for a long time with this company.
In 2017, the European Commission found that, from 2006 to 2014, Amazon had used a company operating in Luxembourg to pay very little tax in the European Union. The shell company had no offices or employees, and, according to the Commission, was only used by Amazon to reduce its taxes. According to the Commission’s estimate, the e-commerce giant avoided tax on three-quarters of all the profits it made from online sales in the EU during that period.
In 2021, however, Amazon won an appeal against the decision. Although the company changed its tax structure following the investigation, it argued at the time that the Commission’s decision was riddled with “methodological errors.” It also said the payments were legal under international tax rules, an argument that Europe’s second highest court agreed with after finding that Amazon’s structure did not give it an advantage over other companies.
In this week’s announcement, the Commission said it was “taking into account the guidance of the EU courts” when closing the case against Amazon. Amazon did not immediately respond to Engadget’s request for comment.
While its last case against Amazon was a setback for the European Commission, earlier this year the body won a decisive victory against Apple. In September, Europe’s highest court ordered the tech giant to repay €13 billion ($14.4 billion) in Irish tax breaks found illegal in 2016.
