European Commission a 2017 ruling said that Amazon is tax-free on nearly three-quarters of its profits from EU operations due to a Luxembourg tax treaty that allows it to funnel profits to a holding company tax-free.
The EU competition authority has equated the tax deal with illegal state aid. However, in 2021 a lower court overturned the EU decision, striking a crackdown on preferential deals by EU competition head Margrethe Vestager.
“The commission was wrong in deciding that Luxembourg provided Amazon with unauthorized government assistance in the form of tax breaks,” said Attorney General Julian. cocott at the Court of Justice (CES) is stated in the optional conclusion.
“The frame of reference on which the Commission relied for the test of electoral advantage, namely OECD Transfer pricing guidance, not Luxembourg law, was wrong,” she said.
Cocott said the general court’s decision to overrule the EU’s decision should be upheld.
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The CJEU, which usually follows such recommendations in four out of five cases, will make a decision in the coming months. Case C-457/21 P Commission v Luxembourg and Others.