Global Daily Tax News, Amazon Wins Partial Reprieve From French Digital Services Tax, (Oct 3, 2025)

Amazon has secured a landmark ruling against authorities in France regarding the nation's digital services tax.

The ruling, from the Cergy-Pontoise Administrative Court, compels France to return just under EUR24m in tax paid by the e-commerce giant in 2019.

The Court agreed with arguments from Amazon that its Amazon Prime and Fulfilled by Amazon services should fall outside the scope of France's digital services tax.

The French DST is a three percent tax on the revenue of digital companies providing advertising services, selling user data for advertising purposes, or performing intermediation services. Companies with global revenues of EUR750m (USD880m) or more and French sales of at least EUR25m are required to pay the tax. The tax applies to turnover realized in France since January 1, 2019.

In ruling for Amazon, the Court said the two services are supplementary, paid-for services that are distinct from its digital intermediation services and should not be included within the DST's scope.

The ruling, released on September 25, 2025, comes within the same month as France's Constitutional Court ruled that the nation's digital services tax legislation is lawful.

That case was brought by a company – Digital Classifieds France – that, too, sought reimbursement of digital services tax payments. Several large digital firms also made arguments in support of the company.

The company challenged the tax on fairness grounds, including, among other things, that the tax treats corporate taxpayers differently depending on whether they are taxable, based on whether their services are digitally supplied or not, and depending on whether or not they belong to a corporate group. The company said the regime results in double taxation of the profits of companies in the digital sector.

The company also criticized how the levy is calculated, including in relation to the rules to determine what proportion of a group's digital services are supplied to recipients in France. It added that the regime is disproportionately more punitive for French operators, due to a perceived lack of oversight of foreign operators.

Finally, the company argued that the lack of a progressive tax scale creates a cliff-edge between competitors who are and are not liable to the digital services tax, with the three percent rate applying from the first euro when the aforementioned thresholds are reached.