The European Commission has lost a landmark case in its efforts to crack down on favourable tax deals between member states and big companies, after the EU’s top court ruled on Thursday it could not force Amazon.com Inc (NASDAQ:AMZN) to pay back €250 million in taxes to Luxembourg.
The European Court of Justice (ECJ) upheld the findings of the lower court which dismissed the argument that the US ecommerce group’s tax arrangements in the bloc amounted to illegal state aid.
But the ECJ has decided that the legal assessment that was relied upon to seek back taxes from Amazon was incorrect.
“The Court of Justice confirms that the commission has not established that the tax ruling given to Amazon by Luxembourg was a state aid that was incompatible with the internal market,” the court said in a statement.
The ruling on Thursday is final and cannot be appealed against.
It could have implications in a long-running dispute aimed at forcing Apple Inc (NASDAQ:AAPL) to pay back €14.3 billion in tax to Ireland.
A ruling in the case is expected next year.