Europe’s General Court ruled that Amazon did not profit from illegal state aid in Luxembourg. This ruling dates back to a 2017 European Commission decision which stated that Amazon benefited from an illegal tax deal with Luxembourg and had to repay €250 million in unpaid taxes to the Grand Duchy. Amazon and Luxembourg have appealed this decision. The verdict follows last year’s defeat for the Commission in its high-profile case against Apple and Ireland.
Chiara Putaturo, Oxfam EU Tax expert said:
“Today’s ruling is a blow. It shows again that case-by-case investigations do not solve large-scale tax dodging. The pandemic is pushing people into poverty, while pandemic profiteers, like Amazon and Jeff Bezos, continue to see their wealth sail without paying their fair share of tax.
“Amazon has seen its profits soar during the pandemic – a record €44bn in European sales alone. Yet, their tax returns filed in Luxembourg showed no tax was paid. Scandals such as OpenLux illustrate that Luxembourg continues to play its role as a major tax haven in the heart of Europe and host thousands of shell companies – corporate entities set up solely for tax dodging purposes. In 2019, levels of Foreign Direct Investments coming in and out of the country were up to 100 times its economic weight.
“Today’s ruling shows the urgent need for the EU to do more to end corporate tax avoidance and bolster government coffers to help fuel the recovery. Now more than ever we need to reform the EU and global tax systems to include an ambitious global minimum tax, an EU digital tax, strong measures to tackle tax havens and real tax transparency.”
Notes aux rédactions
- Spokespeople are available for comment.
- In 2017, the European Commission found that a 2003 Luxembourgish tax deal with Amazon, which was extended in 2011, lowered the tax paid by the company in Luxembourg without any valid justification. The Commission said this enabled Amazon to shift the vast majority of its profits from Amazon EU, an Amazon group company subject to tax in Luxembourg, to Amazon Europe Holding Technologies, an Amazon holding company not subject to tax. Luxembourg and Amazon challenged this decision in court and today the General Court of the European Union overturned the Commission’s decision.
- Today, the Court confirmed a previous state aid decision on energy giant Engie. In 2020, the Court overturned the Commission’s decision on Apple in Ireland – the Commission is appealing this case. The Commission is also carrying out an in-depth investigation on Dutch tax rulings in favour of Nike and Inter IKEA.
- Last week, Amazon Luxembourg released their annual account. They show that, despite skyrocketing sales of €44bn in Europe, the company recorded a €1.2bn loss in their tax returns and paid no tax in 2020 in its headquarter in Luxembourg. An Oxfam analysis published today shows that, while the average US worker pays a tax rate of 22%, Amazon’s US federal tax rate last year was just 9%, despite earning a record $20 billion in US profits.
- Bezos’s wealth has increased by $85 billion since the start of the pandemic. Oxfam estimates that is enough to give each of Amazon’s 1.3 million workers a $65,000 bonus, while still leaving Jeff Bezos with his $113 billion fortune that he had prior to the COVID-19 crisis.
- In February, the journalistic investigation #OpenLux showed that Luxembourg is hosting 55,000 offshore companies with no economic activity. Multinational companies, billionaires and politicians have created these companies for tax avoidance, tax evasion, or money-laundering purposes. Oxfam’s analysis shows that Luxembourg scores high on economic indicators typical of tax havens.
- The EU is currently discussing a proposal for companies’ public country-by-country reporting (pCBCR). 75 CSOs and 131.000 citizens so far have called for a real pCBCR, this includes an obligation for companies to report their profit and tax paid in every country they operate in – not just EU countries and EU-listed tax havens.
- The OECD Inclusive Framework is expected to agree on a global minimum effective tax rate by July. The US administration has proposed a rate of 21%. Oxfam supports an ambitious rate in line with the proposal from the Independent Commission for the Reform of International Corporate Taxation (25%).
Contact
Jade Tenwick | EU Media Officer | +32 473 56 22 60 | jade.tenwick@oxfam.org
- Spokespeople are available for comment.
- In 2017, the European Commission found that a 2003 Luxembourgish tax deal with Amazon, which was extended in 2011, lowered the tax paid by the company in Luxembourg without any valid justification. The Commission said this enabled Amazon to shift the vast majority of its profits from Amazon EU, an Amazon group company subject to tax in Luxembourg, to Amazon Europe Holding Technologies, an Amazon holding company not subject to tax. Luxembourg and Amazon challenged this decision in court and today the General Court of the European Union overturned the Commission’s decision.
- Today, the Court confirmed a previous state aid decision on energy giant Engie. In 2020, the Court overturned the Commission’s decision on Apple in Ireland – the Commission is appealing this case. The Commission is also carrying out an in-depth investigation on Dutch tax rulings in favour of Nike and Inter IKEA.
- Last week, Amazon Luxembourg released their annual account. They show that, despite skyrocketing sales of €44bn in Europe, the company recorded a €1.2bn loss in their tax returns and paid no tax in 2020 in its headquarter in Luxembourg. An Oxfam analysis published today shows that, while the average US worker pays a tax rate of 22%, Amazon’s US federal tax rate last year was just 9%, despite earning a record $20 billion in US profits.
- Bezos’s wealth has increased by $85 billion since the start of the pandemic. Oxfam estimates that is enough to give each of Amazon’s 1.3 million workers a $65,000 bonus, while still leaving Jeff Bezos with his $113 billion fortune that he had prior to the COVID-19 crisis.
- In February, the journalistic investigation #OpenLux showed that Luxembourg is hosting 55,000 offshore companies with no economic activity. Multinational companies, billionaires and politicians have created these companies for tax avoidance, tax evasion, or money-laundering purposes. Oxfam’s analysis shows that Luxembourg scores high on economic indicators typical of tax havens.
- The EU is currently discussing a proposal for companies’ public country-by-country reporting (pCBCR). 75 CSOs and 131.000 citizens so far have called for a real pCBCR, this includes an obligation for companies to report their profit and tax paid in every country they operate in – not just EU countries and EU-listed tax havens.
- The OECD Inclusive Framework is expected to agree on a global minimum effective tax rate by July. The US administration has proposed a rate of 21%. Oxfam supports an ambitious rate in line with the proposal from the Independent Commission for the Reform of International Corporate Taxation (25%).
Jade Tenwick | EU Media Officer | +32 473 56 22 60 | jade.tenwick@oxfam.org