The European Union court has issued two rulings on tax exemptions for multinational corporations: Specifically, it will rule whether Amazon and the French energy company Engie can claim the taxes.
The European Union court will issue two long-awaited rulings on controversial tax breaks for multinational companies in Luxembourg on May 12. Specifically, the judges must decide whether the country of Luxembourg can be compelled by the European Union Commission to demand around 250 million euros in taxes plus benefits from the largest online retailer in the world, Amazon.
The second case concerns taxes amounting to 120 million euros, which Luxembourg is supposed to claim from the French energy company, ENGIE.
Amazon Tax Credit
There was recently renewed excitement over Amazon’s tax preferential treatment. Although the Luxembourg-based Amazon EU S.à.rl (GmbH) supplies millions of households in Great Britain, France, Germany, Austria, Italy, the Netherlands, Poland, Spain and Sweden as customers, thus recording record sales of 44 billion euros in 2020 could show a loss of 1.187 billion Euro in the annual financial statements for 2020, which granted Amazon a tax credit of 56 million euros. (See article).
Anti-competitive advantages
The request in the Amazon case was determined by the European Union Commission in 2017 after it came to the conclusion in the course of an examination that Luxembourg had granted the company anti-competitive benefits from May 2006 to June 2014 in order to bind it itself. The bottom line is that Amazon has not paid taxes on three-quarters of its profits from European Union sales. According to a study by the European Union Commission in 2018, two companies in the Engie Group have paid almost no tax on their profits in Luxembourg for nearly a decade.
Amazon, Engie and Luxembourg rejected the claim that the beneficiaries were unlawful and therefore filed an appeal with the European Union court. The judges in charge there are now talking about rulings, but they can still be appealed to the European Court of Justice (ECJ).
Before the European Court of Justice, the Brussels authority is currently defending a ruling in which the European Union court ruled to revoke an application for Ireland to take back up to 13 billion euros in taxes from Apple. EU court judges ruled in the case that the Commission was unable to demonstrate that Apple’s tax agreements in Ireland from 1991 and 2007 constituted prohibited government aid.
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