Today, the European Court of Justice (“ECJ”) annulled the decision of the Commission[1] that had decided that Luxembourg had granted Amazon unlawful State aid of about EUR 250 million in a tax ruling confirming the arm's length nature of deductible royalty payments by a Luxembourg operating company to a tax transparent Luxembourg partnership.
Following Advocate General Kokott’s opinion, the ECJ considers that the Commission had wrongly determined the “reference system”, which is the first step in analysing a national measure in order to be able to categorise it as State aid. It is worth noting that the ECJ upheld the judgement of the General Court[2] which had annulled the decision of the Commission but not on the same grounds.
For more background on AG Kokott’s opinion, please check out the link below.
