Brussels (Brussels Morning) The EU General court has overturned a European Commission ruling that ordered the retail giant Amazon to pay back 250 million euro in supposedly illegal tax benefits it had received in Luxembourg, RFI reported.
In 2017, the EC’s antitrust chief Margrethe Vestager determined that Luxembourg’s special royalty rate privileges for Amazon represented illegal state aid, insofar as they enabled the company to pay less tax than other companies.
The EU court found that the arrangement provided Amazon with “no selective advantage” over its competition, and noted that the Commission had failed to establish that the company’s tax burden was artificially reduced as a result of overpricing the royalty.
In a similar case brought against the French energy giant Engie, the court ruled that the company had indeed received an illegal tax advantage, and ordered it to repay the 120 million euro in unfair tax breaks it had received.
Both verdicts were the latest in a string of cases against hundreds of multinational companies that had secret deals with the Luxembourg government, which were revealed in the so-called “LuxLeaks” scandal.
The secret tax deals involved a range of high-profile companies, including Apple, Pepsi and Ikea, which paid as little as one percent tax if they registered in the Grand Duchy. The deals were reached while former EC head Jean-Claude Juncker was serving as the Prime Minister of Luxembourg.
The deals were revealed by the International Consortium of Investigative Journalists (ICIJ), which shared 28,000 documents with international media in 2014, detailing many of the deals involved. The revelation pushed the Commission to introduce a new Tax Transparency Package, and continue working on a consolidated tax base for companies operating in the EU.
The Commission has announced it will appeal the General court ruling, taking the case to the highest EU court, the European Court of Justice.