Amazon takes the win in its $303M legal battle in EU tax case

Amazon was declared the winner in a tax legal battle where the EU ordered it to pay Luxembourg the amount of €250 million or around $303 million in back taxes. The win for the American retail giant is said to be a big blow to European Commissioner Margrethe Vestager's campaign against preferential deals.

Why Amazon was favored in the court

As per Reuters, the hitch, which is Amazon’s win in the tax case, triggered renewed calls from EU lawmakers for a global corporate tax deal. Despite losing, analysts said that Vestager is not likely to give up on her crusade regarding the amount of tax that big companies should pay.

In any case, based on the EU’s court ruling, Amazon won in the legal dispute after the group of legislators was not able to show that Luxembourg gave Jeff Bezos’ company a special treatment that violates state aid rules.

"The Commission did not prove to the requisite legal standard that there was an undue reduction of the tax burden of a European subsidiary of the Amazon group," the EU judges stated in the ruling.

This legal dispute stemmed from the order that Amazon received in 2017. The European Commission ordered the American e-commerce and tech firm to pay €250 million to Luxembourg for back taxes.

Second loss for EU tax crusaders

It was mentioned that this is the second defeat for Vestager as it also lost in the court tussle against Apple last year. At that time, the American tech company contested an EU order for it to pay €13 billion or $15 billion in Irish back taxes.

Similar to Amazon’s case, the EU’s court ruled that the commission failed to prove that the Irish government had granted a tax advantage to Apple. The European Commission has since filed an appeal against the ruling in the iPhone maker tax dispute.

Apple and Amazon were said to be targeted by Vestager in the EU's campaign to put an end to tax agreement practices being used by EU states to attract major companies. The group said that such types of deals are not fair.

Meanwhile, Amazon said in a statement that it welcomed the judges’ decision. The company added that it has always been Amazon’s stance to follow all applicable laws and reiterated that it has not received any preferential or special treatment in its dealings.