Should Amazon pay $268 million in Luxembourg back taxes owed to the EU court, the EU court's legal adviser said.
Amazon should not pay back taxes to Luxembourg, as ordered by EU competition enforcers, an adviser to Europe's top court said on Thursday, as she cited mistakes in the EU regulator's assessment.
The European Commission said Amazon paid no taxes on nearly three-quarters of its profits from EU operations due to a Luxembourg tax arrangement allowing it to channel profits to a holding company tax-free.
The EU antitrust watchdog compared the tax deal to illegal state aid. A lower tribunal in 2021 scrapped the EU decision, which was a blow to EU competition chief Margrethe Vestager's crackdown on preferential deals.
The Commission erred in determining that Luxembourg had granted unauthorised state aid to Amazon in the form of tax advantages, said Advocate General Juliane Kokott, the EU Court of JusticeEU Court of Justice, in a nonbinding opinion.
The reference system used by the Commission to review whether there was a selective advantage, namely the OECD Transfer Pricing Guidelines rather than Luxembourg law, was wrong, she said.
Kokott said the general court's ruling invalidating the EU decision should be upheld.
The CJEU, which normally follows such recommendations in four out of five cases, will rule in the coming months.
The case is C - 457 21 P Commission v Luxembourg and others.