An adviser to Europe’s top court said Thursday that EU competition enforcers made errors in ordering Amazon (AMZN.O) to pay Luxembourg 250 million euros ($268 million) in back taxes.
Amazon’s Luxembourg tax arrangement allowed it to route over three-quarters of its EU profits to a holding company tax-free, according to the European Commission’s 2017 judgment.
The EU antitrust inspector called the tax agreement illegal state aid. In 2021, a lower tribunal overturned the EU ruling, undermining Margrethe Vestager’s preferential deal crackdown.
“The Commission erred in deciding that Luxembourg had granted unauthorised state aid to Amazon in the form of tax advantages,” EU Court of Justice (CJEU) Advocate General Juliane Kokott said in a non-binding decision.
“The reference system relied on by the Commission in order to review whether there was a selective advantage, namely the OECD Transfer Pricing Guidelines rather than Luxembourg law, was incorrect,” she stated.
Kokott supported the General Court’s annulment of the EU ruling.
The CJEU will rule in the next months, following such recommendations in four out of five instances.
C-457/21P Commission v Luxembourg and Others.
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