Brussels appeals against €250m Amazon tax defeat

Brussels has appealed against a court ruling that annulled an order from Amazon to pay 250 million euros in taxes to Luxembourg, the EU said in a statement on Thursday.

The General Court, the EU’s highest court, said last May that the commission was “wrong” in several respects in its analysis of the case in 2017.

The ruling says Brussels is not ready to argue that the company’s tax bill has been artificially reduced due to the excessive price of a royalty.

But in its appeal to the court, the European Commission said the court had made a number of legal errors in its ruling.

Similar to his appeal in the Apple State Aid case, Brussels argues that the General Court should have based its ruling on the profits Amazon recorded in Luxembourg, rather than looking at the US where it owns its intellectual property.

“This is because Amazon entities in Luxembourg have already paid for the right to use this intellectual property in Europe, so the profits generated here should be taxed here,” someone with knowledge said.

The appeal is brought before the European Court of Justice.

The commission said in a statement that it was a top priority to ensure that all companies of all sizes ‘pay their fair share of taxes’. While the EU has lost state aid cases due to insufficient evidence, the courts have upheld the principle that member states must determine tax legislation in accordance with EU state aid rules.

“If Member States grant certain multinational enterprises tax advantages that are not available to their competitors, it would jeopardize fair competition within the European Union in violation of state aid rules,” the European Commission added.

Brussels is diligently pursuing matters of state aid with an insignificant record. Last year, Apple lost an order that it had to repay 14.3 billion euros in taxes to the Irish government. This is the most humiliating defeat so far.

The appeal comes after the world’s leading economies agreed to force multinational corporations to pay a global price minimum corporate tax rate.

Amazon did not immediately respond to a request for comment.

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