Amazon No Longer Faces a $300 Million Tax Bill
EU Court Rules in Amazon’s Favor
Amazon (AMZN) will avoid paying $300 million in taxes after a court in the European Union annulled the tax bill. The decision is seen as a victory for the ecommerce giant which has been in conflict with the European Union about its taxes for years.
In 2017 the European Commission, the EU’s antitrust authority, ordered Amazon to pay the taxes in question to Luxembourg. However, in the ruling Wednesday, the court sided with Amazon, saying regulators did not prove that the tech company received an illegal advantage from Luxembourg.
A Setback for EU Regulators
The ruling is a blow to Margrethe Vestager, Executive Vice President of the commission, who has been working to reign in perceived excesses by tech companies including Amazon, Apple (AAPL), and Google (GOOGL). The Amazon tax ruling could hurt her efforts to dismantle what she contends were so-called sweetheart tax deals between large multinational companies and some EU countries including Luxembourg and Ireland.
Vestager also wants to collect back taxes from Starbucks (SBUX), Nike (NKE), and other large corporations. Vestager’s office is studying the judgment and considering possible next steps. The decision could be appealed to the EU’s Court of Justice.
Amazon Cheers EU’s Ruling
Amazon welcomed the ruling by the EU court, saying it did not receive special tax treatment in EU countries. Since the initial ruling in 2017, Amazon has overhauled its tax structure. Last year it argued the EU’s decision contained legal and factual mistakes. Luxembourg joined Amazon in the appeal. In the ruling, the General Court largely backed Amazon’s assertions.
Amazon may have won the tax battle with the EU, but that does not mean regulators in Europe are backing down any time soon. There are still a number of unanswered questions surrounding how the battle between tech and global regulators will play out.
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