Key Points
- Italian prosecutors are investigating Amazon for alleged €1.2 billion ($1.26 billion) tax evasion.
- The investigation focuses on Amazon’s role in facilitating VAT evasion by non-EU sellers.
- If proven, the company’s liability could rise to €3 billion with penalties and interest.
- A separate probe in July 2024 led to a €121 million asset seizure from an Amazon unit.
Italian prosecutors are investigating e-commerce giant Amazon and three executives over alleged tax evasion amounting to €1.2 billion ($1.26 billion). The investigation, which began in 2021, has recently revealed more details, as reported by the Italian newspaper Corriere della Sera. The company highlighted that it ranks among Italy’s top 50 taxpayers, having paid more than $1.4 billion in taxes in the country in 2023.
Milan prosecutors and tax police have investigated Amazon’s Luxembourg-based European unit and three of its managers for allegedly facilitating tax fraud on online sales in Italy between 2019 and 2021. Authorities estimate that if penalties and interest are applied, Amazon’s total liability could rise to €3 billion.
The allegations center around Amazon’s algorithm, which reportedly enables non-EU sellers—primarily from China—to sell goods in Italy without disclosing their identities. This practice is said to help these sellers avoid paying Italy’s value-added tax (VAT).
Italian law holds intermediaries responsible for VAT payments if they facilitate sales from non-EU sellers who fail to comply with tax regulations. If the accusations hold up in court, Amazon’s business model across Europe could face significant risks, as VAT regulations are standardized across EU nations.
The investigation originated from routine tax police checks conducted in northern Italy. Authorities believe Amazon’s platform allowed non-compliant sellers to evade VAT obligations, leading to significant financial losses for the Italian government.
This is not the first time Amazon has faced scrutiny in Italy. In July 2024, Italian tax police seized approximately €121 million from an Italian Amazon subsidiary as part of a separate probe into tax fraud and labor law violations. Prosecutors accused Amazon Italia Transport of bypassing tax and labor regulations by using cooperatives and shell companies to reduce VAT payments and social security contributions. At the time, Amazon stated it had adhered to all applicable laws.
