The EU Commission has closed the formal investigation into the Amazon State Aid case and concluded that the contested tax ruling issued by Luxembourg in favour of Amazon does not constitute State aid within the meaning of Article 107(1) TFEU.
The decision was adopted on 28 November 2024, and published in the Official Journal on 28 November 2025.
The decision concerns a Luxembourg tax ruling issued on 6 November 2003 in favour of an Amazon group company and examined by the European Commission under EU State aid rules. The ruling approved a transfer pricing arrangement governing the allocation of profits between a Luxembourg operating company and a related group entity, based on a royalty structure and a TNMM type remuneration for the operating company.
In its earlier Opening Decision, the Commission had expressed serious doubts that the ruling complied with the arm’s length principle. Those doubts were based on the view that the ruling endorsed a remuneration and royalty outcome that deviated from what independent parties would have agreed, as interpreted through Article 9 of the OECD Model Tax Convention and the OECD Transfer Pricing Guidelines. On that basis, the Commission had provisionally considered that the ruling conferred a selective advantage and could constitute unlawful State aid.
Following the annulment of the Commission’s earlier negative decision by the EU courts, and in particular the judgment of the Court of Justice in Commission v Amazon of 14 December 2023, the Commission reassessed the case. It accepted that, at the time the tax ruling was granted in 2003, the arm’s length principle was not explicitly incorporated into Luxembourg tax law. As a result, that principle could not lawfully serve as the reference framework for determining whether a selective advantage existed for State aid purposes.
The Commission acknowledged that its earlier doubts were based on an arm’s length principle derived from OECD instruments rather than from Luxembourg national law as it stood in 2003. According to settled case law, only principles actually anchored in national law can be used to identify the normal tax system against which a tax ruling is assessed. Errors in identifying that reference system necessarily invalidate the analysis of selective advantage.
In light of this, the Commission concluded that it could not establish that the Luxembourg tax ruling conferred a selective advantage on Amazon. Since the conditions for finding State aid under Article 107(1) of the Treaty are cumulative, the absence of a selective advantage meant there was no need to examine the remaining criteria.
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