Amazon slams $265 million tax order as it seeks to get EU appeal thrown out

An EU choice ordering Amazon to pay about 250 million euros ($265 million) in again taxes to Luxembourg depends on “atmospherics” and is with out benefit, the corporate stated on Thursday, because it sought to persuade Europe’s prime courtroom to throw out an enchantment by EU regulators.

The European Commission in its 2017 choice stated a Luxembourg tax association permitting Amazon to channel income to a holding firm tax-free meant it paid no taxes on nearly three-quarters of its income from EU operations, in essence amounting to unlawful state support.

The U.S. on-line retailer challenged the EU tax order in a decrease tribunal, convincing it to scrap it in 2021, in a setback to competitors chief Margrethe Vestager’s crackdown on preferential offers.

The Commission subsequently appealed to Europe’s highest courtroom, the Court of Justice of the European Union (CJEU).

“The Commission relies heavily on atmospherics to paint Amazon in a negative light and justify its decision. It claims the decision is about tax structuring and tax dodging. But it is not,” Amazon lawyer Michel Petite informed the CJEU.

He stated the EU govt’s enchantment lacked benefit because it used the incorrect reference framework to find out whether or not Amazon had a selective benefit, citing the CJEU’s judgment final yr on Fiat’s tax case which stated such a framework ought to take note of nationwide legal guidelines.

Petite additionally faulted the Commission on its idea of switch pricing, that are costs for items and companies offered between subsidiaries. “The most striking illustration of the Commission’s made-up transfer pricing is perhaps the fact that it relies on a concocted compilation of different versions of the OECD Guidelines, spanning a period of more than 20 years,” he stated.

Commission lawyer Paul-John Loewenthal stated it was clear that Amazon’s Luxembourg tax deal constituted state support.

“Luxembourg provided a measure to Amazon by which Amazon could exempt the vast majority of its European profit from taxation in return for investments in Luxembourg, thus affecting intra-EU trade and distorting competition,” he stated.

“That is the very definition of fiscal state aid.”

Vestager’s crackdown has already pressured Belgium, Ireland, Luxembourg and the Netherlands to alter their tax practices.

The CJEU adviser will ship a non-binding opinion on June 8, with a judgment due within the coming months. The case is C-457/21 P Commission v Luxembourg and Others.

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