Today, the European Court of Justice ruled that Luxembourg did not provide illegal state aid to Amazon through a tax deal. The ruling overturns the 2017 decision from the European Commission ordering Amazon to pay back 250 million euros in unpaid taxes to the Grand Duchy.
In response, Chiara Putaturo, Oxfam EU tax expert, said:
“Amazon got an early Christmas present this year, as the company dodged its decade-old tax bill to Luxembourg and can continue to till this day.
“This is why the EU must come forward with real tax reforms. It can start by not looking the other way when it comes to tax havens within its borders allowing companies to sidestep their tax bills through empty offices. It is no coincidence that EU tax havens like Luxembourg are hijacking crucial tax reforms such as the proposal to crack down on shell companies in the EU.
“When countries allow multinationals to escape their tax duties, they line up with super-rich company owners and leave the rest of us to pick up the tab.”
Notes to editors
Chiara Putaturo is available for interview and comment.
In 2017, the European Commission found that a 2003 tax arrangement between Luxembourg and Amazon, extended in 2011, unjustifiably reduced Amazon’s tax bill. This allowed Amazon to avoid taxes on nearly three quarters of its profits by shifting them from taxed Amazon EU to untaxed Amazon Europe Holding Technologies. According to the Commission’s decision, Amazon should repay the €250 million in unpaid taxes to Luxembourg who along with Amazon challenged the decision. The General Court (lowest court) initially overturned the Commission’s decision, a judgement confirmed today by the European Court of Justice (highest court).
Amazon’s profits tripled in 2021 compared with 2019, making it one of the biggest corporate winners of the pandemic.
For the last 8 years, the European Commission has identified aggressive tax planning risks in Luxembourg.
The EU's attempts at tax reforms include:
- In 2021, the European Commission proposed rules to stop shell companies – letterbox companies used to dodge taxes – in Europe. EU countries are negotiating the text with reports that Luxembourg raised the most objections to the proposal. The 2021 OpenLux scandal revealed Luxembourg hosts 55,000 letterbox companies with several used for facilitating tax avoidance, evasion, or money laundering.
- In September 2023, the European Commission presented BEFIT (Business in Europe: Framework for Income Taxation) - a set of EU corporate tax rules. The proposal does not include the redistribution of taxable profits among EU countries according to real economic activities of companies, as originally envisaged.
- In November 2023, all EU countries – including Luxembourg – voted against a UN resolution to create a tax convention. The resolution, proposed by African countries, aimed to address tax havens and aggressive tax planning. It passed.
Contact information
Chiara Putaturo is available for interview and comment.
In 2017, the European Commission found that a 2003 tax arrangement between Luxembourg and Amazon, extended in 2011, unjustifiably reduced Amazon’s tax bill. This allowed Amazon to avoid taxes on nearly three quarters of its profits by shifting them from taxed Amazon EU to untaxed Amazon Europe Holding Technologies. According to the Commission’s decision, Amazon should repay the €250 million in unpaid taxes to Luxembourg who along with Amazon challenged the decision. The General Court (lowest court) initially overturned the Commission’s decision, a judgement confirmed today by the European Court of Justice (highest court).
Amazon’s profits tripled in 2021 compared with 2019, making it one of the biggest corporate winners of the pandemic.
For the last 8 years, the European Commission has identified aggressive tax planning risks in Luxembourg.
The EU's attempts at tax reforms include:
- In 2021, the European Commission proposed rules to stop shell companies – letterbox companies used to dodge taxes – in Europe. EU countries are negotiating the text with reports that Luxembourg raised the most objections to the proposal. The 2021 OpenLux scandal revealed Luxembourg hosts 55,000 letterbox companies with several used for facilitating tax avoidance, evasion, or money laundering.
- In September 2023, the European Commission presented BEFIT (Business in Europe: Framework for Income Taxation) - a set of EU corporate tax rules. The proposal does not include the redistribution of taxable profits among EU countries according to real economic activities of companies, as originally envisaged.
- In November 2023, all EU countries – including Luxembourg – voted against a UN resolution to create a tax convention. The resolution, proposed by African countries, aimed to address tax havens and aggressive tax planning. It passed.