Luxembourg on Friday appealed the European Commission’s October order that it collect some €250 million in back taxes from Amazon.
“Luxembourg believes that the Commission has not established the existence of a selective advantage” for Amazon, Luxembourg said in a statement.”Furthermore, Luxembourg does not share the Commission’s analysis with regard to transfer pricing.”
On October 4, Commissioner for Competition Margrethe Vestager ruled a 2003 tax deal between one of Europe’s lowest tax jurisdictions and the e-commerce titan amounted to illegal state aid.
Investigators concluded that the 2003 deal allowed Amazon to attribute the vast bulk of its EU profits between 2006 and 2014 to a holding company, a complicated corporate entity that was not liable to pay taxes in Europe.
That was approved by Luxembourg’s tax authorities despite the holding company, Amazon Europe Holding Technologies, having “no employees, no offices and no business activities,” according to the Commission.
“Almost three-quarters of Amazon’s profits were not taxed,” Vestager said at the time. Amazon denied any wrongdoing.
Previous state aid decisions targeting tax have also been appealed, including last year’s order that Apple pay €13 billion to Ireland. Vestager’s decisions come amid a wider push by the Commission and some national capitals to clamp down on corporate tax avoidance and update Europe’s tax rules for the digital age.
In a statement today, Luxembourg said: “This appeal seeks to obtain legal certainty, and does not put into question Luxembourg’s strong commitment to tax transparency and the fight against harmful tax practices.”