Margrethe Vestager seemed to have them all with her in October 2017. That’s when she announced that Amazon had to pay 250 million euros to the European Union for back taxes.
However Amazon has won the appeal in the European Courts, and you will not have to face the payment of that amount. The setback has another precedent: that of another appeal won by Apple in July 2020 and that prevented it from paying about 13,000 million in back taxes in Ireland.
Neither back taxes nor ‘Google rate’ in action at the moment
In that case, Apple was accused of taking advantage of Irish state aid, but in the Amazon lawsuit it was sued for the use of a Luxembourg-based company: from 2006 to 2014 Amazon paid significant royalties to this company, called Amazon Europe Holding Technologies SAS, and with this it managed to reduce its income and operating profits.
During the appeal, Amazon defended itself stating that the preliminary decision had been full of “errors of methodology” and that those payments to the Luxembourg company were entirely legal. It has not been confirmed whether the European Commission will appeal this decision again.
There are already several attempts by this body to manage to collect more taxes from big tech Americans, and there is a joint effort by the G20 and the OECD to create a minimum tax on these companies – some countries have tried to activate their own “Google rates” with uneven results – which however has not yet been defined.
Via | WSJ
More information | Europa.eu