Field Court Tax Chambers

Philip Baker KC appeared as part of the Irish legal team that intervened in the Amazon case before the CJEU.  The team supported Luxembourg and Amazon, and the judgment handed down by the Court today has rendered a favourable decision for Luxembourg and Amazon.  It deals with Article 107(1) of the Treaty on the Functioning of the European Union, and a tax ruling granted by the Luxembourg tax administration in the wake of Amazon’s restructuring in 2006.  The European Commission challenged the tax ruling, on the basis that it did not comply with the Transfer Pricing arms length principles.  In applying the rationale set out in the 2022 case of Fiat Chrysler, the CJEU held that the arm’s length principle was enshrined in Luxembourg tax law – but this has only been since 1 January 2017.  Therefore, it could not be applied retrospectively to the time the ruling was granted to Amazon.  Accordingly, it held that applying the rules applicable under the relevant law at the time, there was no tax advantage and the Commission had not established the same pursuant to the meaning of Article 107(1) in order to satisfy any form of annulment of the decision. 
A copy of the decision can be found here.

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