Amazon Faces Dual Investigations In Italy For Alleged Tax Evasion, Labor Violations

U.S. retail giant Amazon.com, Inc. AMZN has been investigated twice this week for allegedly conducting suspected tax evasion in Italy.

Italy’s tax police on Tuesday seized about 121 million euros ($131 million) from Amazon Italia Transport in Milan as part of an investigation into alleged tax fraud and illegal labor practices, according to prosecutors’ documents, Reuters reported.

The Milan Prosecutors’ Office accused the logistic services unit of dodging labor and tax laws, relying on cooperatives or limited liability companies to supply workers while skipping value-added-tax duties and lowering social security payments.

Prosecutors alleged that the Amazon unit did this to maintain competitive prices in the Italian market, while Amazon said it complied to all applicable laws and regulations and will continue to help authorities with inquiries.

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Two sources said on Friday that Milan is also probing Amazon for suspected tax evasion at another business unit in Milan, according to Reuters. This investigation, which is unrelated to the other incident, began in 2021 and was triggered by tax police holding routine checks north of Milan, the sources said.

The probe centers on tax regulations related to trading goods both within Italy and internationally, particularly focusing on value-added taxes and customs duties, according to the sources.

The size of the potential tax evasion has not yet been quantified, the sources told Reuters.

Italy’s tax authorities and tax police in Monza, a city north of Milan, have looked into Amazon accounts in Italy over the past few years as part pf this probe, they added.

An email to Amazon seeking comment on the two investigations has not been immediately returned.

Price Action: Amazon had gained 1.36% to $182.30 at the time of publication Friday.

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