Amazon wants Europe’s top court to throw out an appeal by the EU that would force the eCommerce giant to pay $265mln in back taxes to Luxembourg, stating the case is flawed and without merit.
In its 2017 decision, the European Commission ruled that Amazon’s Luxembourg tax deal, which resulted in it paying no taxes on almost three-quarters of its profits from its EU operations, essentially amounted to illegal state aid.
Amazon successfully challenged the tax order in a lower tribunal, with the Commission subsequently appealing to Europe’s highest court, 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,” Amazon lawyer Michel Petite told the CJEU during a hearing on Thursday.
Petite also argued that the EU’s appeal lacked merit as it used the wrong reference framework to determine whether Amazon had a selective advantage and raised issues with the Commission’s concept of transfer pricing.
Amazon’s Luxembourg tax arrangement “is the very definition of fiscal state aid,” argued Commission lawyer Paul-John Loewenthal.
"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," Loewenthal said.
A CJEU advisor will hand down a non-binding opinion on the matter on June 8, with a judgement to follow in the coming months.
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