The EU favored Amazon in its tax arrangement case against Luxembourg's government. Because of this, the American e-commerce giant will no longer have to pay over $270 million in back taxes.
The European Union's top Court confirmed this on Thursday, Dec. 14. The announcement made by the Court of Justice is a huge defeat for the 27-nation supranational political organization.
Here's why the Court of Justice favored the giant retailer against the European Union.
EU Favors Amazon in Tax Arrangement Case
According to ABC News' latest report, the legal battle that the EU lost against Amazon was its effort to tackle the company's alleged corporate tax avoidance.
EU's crackdown specifically targeted sweetheart tax deals, which involve tax breaks or other inducements to allow a business in a city or state.
The final decision of the EU top court backed judges in a lower court who sided with Amazon back in 2021. During that year, they argued that the European Commission wasn't able to prove its case that the American retailer received illegal state support.
"The Court of Justice confirms that the (European) Commission has not established that the tax ruling given to Amazon by Luxembourg was state aid that was incompatible with the (EU's) internal market," said the Court of Justice via CNN Business.
An Amazon spokesperson said that they completely welcome the decision of the top EU court, saying that they complied with all laws in the European market and didn't receive any special treatment from officials.
"We welcome the Court's ruling, which confirms that Amazon followed all applicable laws and received no special treatment. We look forward to continuing to focus on delivering for our customers across Europe," said the Amazon official.
Top EU Court's Decision Criticized
Since the decision of the EU Court of Justice favored Amazon, many experts criticized officials.
One of them is Oxfam's EU tax expert Chiara Putaturo, who said that the giant retailer clearly got an early Christmas present from judges before 2023 ends.
She explained that the decision allowed the e-commerce giant to avoid its alleged decade-old tax bill to Luxembourg. The tax expert warned that what the Court of Justice did could let Amazon do the same thing in the following years.
Putaturo called out EU officials, saying they should come forward with "real tax reforms."
"It can start by not looking the other way when it comes to tax havens within its borders allowing companies to sidestep their tax bills through empty offices," she added.
