The Court of Justice of the European Union (CJEU) has dismissed an appeal by the European Commission against a ruling by the lower General Court on a tax case involving Amazon and Luxembourg.

The commission had found in 2017 that Luxembourg’s tax treatment of two Amazon subsidiaries amounted to illegal state aid.

The General Court subsequently annulled the ruling, however, after a challenge from the company and Luxembourg.

Reference system

The CJEU today (14 December) rejected the commission’s appeal against that decision, despite finding that the lower court had made “errors of law”.

The CJEU judges concluded 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.

“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.” the judgment stated.