Italian prosecutors are examining whether online giant Amazon.com evaded 1.2 billion euros in value-added tax (VAT) it should have paid on behalf of certain third-party sellers, sources told AFP Monday.<div class="paywall-selector"></div><div class="paywall">



The total claim against the online retailer, including penalties, could rise to as much as three billion euros ($3.14 billion), a source in Italy&#8217;s financial crimes police said.



The preliminary investigation, confirmed by a source within the Milan prosecutors&#8217; office, involves a three-year period from 2019 to 2021.



An Italian law in 2019 made e-commerce businesses responsible for the VAT owed by its third-party sellers outside the European Union selling goods to customers in Italy.



Previously, these third-party sellers were responsible for paying the tax.



The Italian law came ahead of a reform of EU e-commerce rules, which took effect in July 2021, that sought to simplify how online platforms collect VAT.



A review of transactions from 2019 to 2021 by Italy&#8217;s financial crime police found &#8220;unpaid VAT&#8221; by Amazon amounting to 1.2 billion euros, a source at the force told AFP.



&#8220;If you add to this sum the penalties&#8230; you get up to three billion euros,&#8221; the source said.



The police investigation, begun in the spring of 2024, wrapped up in December.



Amazon said it would not comment on ongoing investigations, but said it was &#8220;committed to complying with all applicable tax laws&#8221;.



The Seattle-based tech company added that it had paid direct and indirect taxes of 1.4 billion euros to Italy in 2023.



A preliminary investigation by prosecutors does not necessarily lead to charges.



The Italian investigation comes as US President Donald Trump, who has railed against his country&#8217;s trade deficit with the EU, has threatened the bloc with reciprocal tariffs.



He has said that VAT &#8212; which is not a tariff but a consumption tax irrespective of the origin of the good &#8212; could be subject to a reciprocal levy.



The EU measure that made online platforms liable for the tax obligations of third-party sellers was designed to ensure fair competition for the bloc and recoup lost VAT.



The reform also removed an exemption on collection of the tax on low-value goods.</div>

The total claim against the online retailer, including penalties, could soar to €3 billion ($3.14 billion).

Italy is investigating Amazon over an alleged €1.2 billion tax dodge

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Italy is investigating Amazon over an alleged €1.2 billion tax dodge | Fortune Europe

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