Italian tax authorities executed searches on Thursday at Amazon’s Milan headquarters as part of a fresh tax evasion investigation, reports Reuters citing its sources familiar with the matter.
According to Reuters, the Guardia di Finanza, Italy’s tax police, also conducted searches at the residences of seven Amazon executives and the offices of auditing firm KPMG.
The probe is focused on whether Amazon operated an undisclosed, permanent establishment in Italy between 2019 and 2024, which would have obligated the company to pay higher taxes in the country.
The investigation is a continuation of an earlier inquiry into Amazon’s tax practices in Italy.
Milan prosecutors have launched an investigation into Amazon EU Sarl, the Luxembourg-based subsidiary of Amazon, and its director, Barbara Scarafia, suspecting that they failed to declare income. A 13-page search warrant seen by Reuters revealed these details.
Scarafia’s lawyer was unavailable for comment. According to the warrant, Amazon had an established presence in Italy even before August 2024, when the company entered into a “co-operative compliance” programme with Italy’s tax authorities and began paying taxes in the country.
Prosecutors allege that Amazon EU Sarl dismissed and rehired 159 employees from another Amazon company in 2024, an action they believe indicates a permanent establishment in Italy until that point.
Tax authorities seized various items, including computers and IT devices belonging to managers, containing hard drives that stored staff emails deleted from Amazon’s systems every three months.
The search at KPMG was linked to the firm’s involvement in providing opinions on the matters at the center of the investigation. KPMG is not under investigation.
This investigation is just one in a series of legal battles Amazon faces in Italy.
In December, the company agreed to pay 510 million euros ($605.88 million) to settle a previous tax dispute with Italy’s tax collection agency.
Milan prosecutors are also looking into a case of alleged tax evasion involving Amazon, linked to 1.2 billion euros in unpaid taxes from 2019-2021.
A resolution in that probe is expected in the coming months.
Additionally, Amazon is facing two other ongoing investigations in Italy, including one related to suspected tax evasion from 2021-2024 and another regarding alleged customs fraud involving Chinese imports.
