Tax break ruling shows need for political answer to Amazon

Wednesday 12 May 2021

The EU Court of Justice has today over-ruled the European Commission’s 2017 order for Amazon to pay €250 million in unpaid taxes. A technical loophole has meant the corporate behemoth may get away with shifting the profits it generates across Europe to notoriously tax-friendly Luxembourg.

In 2017, Competition Commissioner Margrethe Vestager instructed Amazon to pay its unpaid taxes to Luxembourg following an investigation into illegal state aid. The corporation had been exempt of paying tax on an estimated three quarters of its profits over the previous years.

The ruling comes after the news broke last week that Amazon paid no corporation tax in 2020. The online retailer experienced rapid expansion during a period in which governments rightly stepped in to keep the economy afloat. Yet, not only did it pay no corporate tax on its €44 billion income, but in fact it received €56 million in tax credits from the government of Luxembourg.

The EU Court of Justice ruling comes on the very day that Amazon boss Jeff Bezos has been requested by the European Parliament to testify in the context of an investigation into its labour practices.

“It is clear that the rules are broken and need fixing. Amazon, the corporation run by the richest man on the planet, gets sweetheart tax deals while working people have gone to great effort and risk to keep our societies going.”

“Amazon specialises in one thing above all else: finding legal loopholes and exploiting them to the maximum. They dodge their tax responsibilities, undermine fair competition, drive down working conditions by sidestepping their workers’ right to bargain collectively and they brush aside their vast environmental impact. This approach runs deep throughout their business model. That cannot be rectified with an occasional wrist slap.”

“We need a political response. The European Parliament is taking some encouraging steps in this direction and their initiative must be backed by the European Commission and Member States so that we can have a thorough and full investigation into Amazon’s practices across the board.”

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