US-based e-commerce giant Amazon has emerged victorious in a tax battle with the European Union (EU) over illegal tax benefits accusations.

The Court of Justice of the EU (the ECJ) confirmed that the European Commission (EC) “has not established that the tax ruling given to Amazon by Luxembourg was a state aid”.

In a case dating back to 2017, the EC accused Amazon of receiving illegal tax benefits and ordered the online retailer to pay €250m ($273m) to Luxembourg.

Amazon allegedly received tax advantages between 2006 and 2014 in the country without any justification.

In 2021, Luxembourg and the retailer challenged the decision in the General Court of the EU and won the case after the EC failed to prove that an illegal tax advantage was given to Amazon.

The latest ECJ ruling dismissed an appeal submitted by the EC.

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The court said in a statement: “The General Court had annulled the commission decision owing to errors committed in the application of that reference system and, therefore on the basis of an inaccurate hypothesis that that system complied with the treaty.”

An Amazon spokesperson was quoted by Reuters as saying: “We welcome the court’s ruling, which confirms that Amazon followed all applicable laws and received no special treatment. We look forward to continuing to focus on delivering for our customers across Europe”.

In December 2023 Amazon filed a motion in the US Federal Court to dismiss a US Federal Trade Commission lawsuit accusing the company of engaging in anticompetitive practices.