Amazon EU executives may face trial in Italy over €1.2-billion tax evasion

Prosecutors in Milan have requested a trial for the European division of Amazon and four of its managers over alleged tax evasion.

The retail giant stands accused of having evaded fiscal payments totalling about  €1.2 billion, according to a report by Reuters citing two sources familiar with the matter.

The case marks an unusual development in Italy because the US technology giant had already agreed in December to pay €527 million, including interest, to the country’s Revenue Agency in order to settle the tax dispute.

In previous investigations involving other multinational companies, once a financial settlement had been reached and payment completed, prosecutors typically closed related criminal proceedings, either through plea agreements or by dropping the cases entirely.

However, Milan prosecutors chose not to follow the approach taken by the tax authorities and instead decided to continue their investigation, ultimately requesting that the suspects stand trial.

Following the settlement in December, Amazon said it would "forcefully defend its position on the potential ungrounded criminal case".

"Unpredictable regulatory environments, disproportionate penalties, and protracted legal proceedings are increasingly affecting Italy's attractiveness as an investment destination", the company added.

A judge will now schedule a preliminary hearing to determine whether the defendants should formally face charges or whether the case will be dismissed.

The investigation focuses on alleged value-added tax (VAT) evasion connected to online sales in Italy between 2019 and 2021. Prosecutors and tax police are examining the activities of four managers along with Luxembourg-based Amazon EU Sarl.

According to charges reviewed by Reuters, Amazon’s algorithm and business model allegedly allowed goods from tens of thousands of non-EU sellers—mainly from China—to be sold in Italy without revealing their identities, which could have helped them avoid paying VAT.

Under Italian law, online platforms that facilitate sales can be held jointly responsible for unpaid VAT owed by non-EU merchants operating through their systems.

In the request for trial, Milan prosecutors also listed the Italian Economy Ministry as the injured party. If the allegations are confirmed in court, the case could challenge Amazon’s wider business model across European Union countries, where VAT rules are harmonised, the sources said.

Prosecutors in Milan are also pursuing two additional investigations involving the company. One concerns suspected customs and tax fraud linked to imports from China, while another is examining whether Amazon operated an undeclared permanent establishment in Italy between 2019 and 2024 and should therefore have paid additional taxes in the country.

Separately, on February 24, Italy’s privacy regulator ordered a local Amazon unit to stop using the personal data of more than 1,800 employees working at a warehouse located northeast of Rome.

By Nazrin Sadigova