Italian Tax Police Conduct Raids in Amazon Investigation

On Thursday, Italian Tax Police launched searches at various locations, including Amazon’s offices. This move is linked to a recent tax evasion inquiry regarding the U.S. tech giant, as confirmed by two sources familiar with the situation.

Authorities also carried out searches at the homes of seven Amazon executives and the offices of the auditing firm KPMG.

This investigation seeks to determine whether Amazon had an undisclosed permanent presence in Italy between 2019 and 2024, which might obligate the company to pay more taxes.

Despite attempts to reach Amazon for comments, the company was unavailable. KPMG also chose not to comment on the situation.

In a related development, Milan prosecutors have initiated an inquiry into Amazon EU Sarl, based in Luxembourg, and its director, Barbara Scaraffia, for allegedly failing to declare income. This information comes from a 13-page search warrant reviewed by Reuters.

Scaraffia’s lawyer has not been reachable for comments either.

The search warrant indicates that Amazon’s presence in Italy was considered permanent before August 2024, when the company started participating in a “cooperative compliance” program with Italian tax authorities and began settling its tax obligations in Italy.

Prosecutors believe that Amazon EU Sarl’s actions of firing and rehiring 159 employees from another Amazon entity in 2024 established the company’s permanent presence in Italy.

During the operation, tax officers seized computers and other IT devices from administrators, including hard drives containing employee emails, which are typically deleted from Amazon systems every three months.

The search at KPMG was initiated because the firm provided information about practices central to the investigation, although KPMG itself is not a target of the inquiry.

This raid is part of a broader set of actions concerning Amazon’s tax practices in Italy.

In December, the company agreed to pay 510 million euros (approximately $605.88 million) to settle a prior tax dispute with Italy’s tax authorities.

Sources suggest that the public prosecutor’s office in Milan is likely to wrap up its investigation into alleged tax evasion totaling around 1.2 billion euros for the years 2019 to 2021 early this year.

Additionally, prosecutors are also pursuing two further investigations related to Amazon. One concerns potential tax evasion from 2021 to 2024, while the other addresses alleged customs and tax fraud linked to imports from China.