European Commission ends state aid case against Amazon with no tax payout

Amazon won’t need to pay the European Union €250 million ($263 million) in back taxes. On Wednesday, the bloc’s executive branch said it was closing three separate state aid investigations, including one involving Amazon. The decision ends one of the company’s longest-running legal sagas.

In 2017, the European Commission found that, from 2006 to 2014, Amazon had used an operating company in Luxembourg to pay substantially less tax to the European Union. The shell company had no offices or staff, and was, according to the Commission, used solely by Amazon to lower its tax bill. By the Commission’s estimate, the e-commerce giant avoided taxation on three quarters of all the profit it made from online sales in the EU during that period.

In 2021, however, Amazon won an appeal against the ruling. Although the company changed its tax structure following the investigation, it argued at the time that the Commission’s decision was full of “methodological errors.” It also said the payments were legal per international tax principles, an argument Europe’s second-highest court agreed with after finding Amazon’s structure didn’t confer it an advantage over other companies. Subsequently, the court ordered the Commission’s decision annulled.

With this week’s announcement, the Commission said it was “taking into account the guidance of the EU Courts” in closing the case against Amazon. Amazon did not immediately respond to Tech Reader’s comment request.

While the end of its case against Amazon is a setback for the European Commission, earlier this year the body won a decisive victory against Apple. In September, Europe’s highest court ordered the tech giant to pay back a €13 billion ($14.4 billion) tax break from Ireland that was found to be illegal in 2016.