Prosecutors in Milan are moving forward with criminal charges against Amazon’s European operations and four company executives in connection with alleged tax evasion totaling approximately $1.4 billion, according to sources familiar with the matter.
The decision to pursue criminal proceedings represents a rare departure from standard practice in Italy, particularly given that Amazon reached a settlement agreement with the country’s tax authorities in December, paying $527 million including interest to resolve the dispute.
Historically, when international corporations have settled tax matters and made required payments, Italian prosecutors have typically concluded their criminal investigations through plea agreements or case dismissals. However, Milan prosecutors chose not to follow the tax agency’s lead and continued their investigation, ultimately requesting that the defendants face trial.
Amazon has not responded to requests for comment regarding the latest development. Following the December tax settlement, the technology company stated it would “forcefully defend its position on the potential ungrounded criminal case.”
The company also expressed concerns about Italy’s business climate, stating: “Unpredictable regulatory environments, disproportionate penalties, and protracted legal proceedings are increasingly affecting Italy’s attractiveness as an investment destination.”
A judge will schedule a preliminary hearing to determine whether the defendants should be formally indicted or if the case should be dismissed.
The investigation centers on what prosecutors describe as a “VAT-avoidance algorithm” involving Amazon EU Sarl, based in Luxembourg, and four company managers. Authorities allege the scheme involved VAT evasion on online sales conducted in Italy from 2019 through 2021.
According to charging documents, Amazon’s software systems and business operations facilitated sales of products in Italy by tens of thousands of sellers from outside the European Union – primarily from China – while concealing the sellers’ identities and helping them avoid value-added tax obligations.
Italian regulations hold intermediary platforms jointly liable for unpaid VAT when non-EU sellers use their services to conduct business in the country. Prosecutors have identified Italy’s Economy Ministry as the harmed party in their trial request.
Legal experts suggest that if the allegations are proven in court, they could threaten Amazon’s operational framework throughout Europe, since VAT regulations are standardized across EU member nations.
This case represents just one of multiple legal challenges Amazon faces in Italy. The European Public Prosecutor’s Office is conducting a separate investigation into similar alleged violations covering the period from 2021 to 2024.
Milan prosecutors are also pursuing two additional investigations: one examining alleged customs and tax fraud related to Chinese imports, and another questioning whether Amazon maintained an undeclared permanent business presence in Italy between 2019 and 2024, which would have required additional tax payments.
In a separate matter, Italy’s privacy regulator issued an order on February 24 requiring a local Amazon subsidiary to cease using personal information from more than 1,800 workers at a distribution facility located northeast of Rome.
