EU Court to Rule May 12 on Amazon Appeal of Order to Pay EUR 250 Million

Europe’s second-highest court will rule on May 12 on Amazon.com’s appeal of an EU order to pay about EUR 250 million ($300.5 million or roughly Rs. 2,226 crores) in back taxes to Luxembourg.

The European Commission in its 2017 decision said the Grand Duchy spared the US online retailer from paying taxes on almost three-quarters of its profits from EU operations by allowing it to channel profits to a holding company tax-free.

Luxembourg also appealed to the Luxembourg-based General Court, contending its treatment of Amazon was legal because it did not give the company a selective advantage.

Amazon has its EU headquarters in Luxembourg and employs 1,500 people there, making it one of the biggest employers in the country of half a million.

The General Court will also rule on May 12 on French utility Engie’s challenge to the European Commission’s 2018 order to pay back taxes of EUR 120 million (roughly Rs. 1,068 crores) to Luxembourg.

Regulators said the arrangement with Luxembourg authorities artificially reduced Engie’s tax burden which meant it paid an effective corporate tax rate of 0.3 percent on certain profits in Luxembourg for about a decade.

Luxembourg also appealed the decision.

The cases are T-816/17 Luxembourg v Commission & T-318/18 Amazon EU v Commission, and T-525/18 Engie Global & T-516/18 Luxembourg v Commission.

© Thomson Reuters 2021