Italian Financial Police Seize €121 Million from Amazon Over Tax Fraud Allegations

Italian Financial Police Seize €121 Million from Amazon

In a significant move, Italian financial police have confiscated €121 million from an Amazon unit based in Milan, following allegations of tax fraud and the exploitation of workers. The investigation has unveiled a troubling scheme involving what are known as “labour reservoirs.” This system reportedly allows large corporations to illegally outsource logistics services to other firms and cooperatives, thereby minimizing labor costs and evading tax obligations. This information was reported by the state-run ANSA news agency.

The seizure order elaborated on the nature of the tax fraud, highlighting the employment of an “illicit mechanism of invoices” tied to non-existent transactions. This was purportedly facilitated through a web of fake contracts created for the provision of labor, leading to the issuance and utilization of fraudulent documents. Prosecutors in Milan conducted a thorough reconstruction of the “labour supply chain,” revealing that labor relations were filtered through intermediary companies. These intermediaries, in turn, engaged several cooperative entities that systematically neglected to pay VAT, as well as social security and welfare contributions.

As of now, Amazon Italy has not provided a response to Euronews’ inquiry regarding the allegations. This case positions Amazon among a growing list of high-profile investigations by Italian prosecutors, which have previously scrutinized major companies such as DHL, Uber, and Lidl. Notably, the vacation rental giant Airbnb recently agreed to a settlement of €576 million to resolve a lengthy four-year tax dispute in Italy.

Earlier this year, Amazon found itself facing scrutiny for alleged unfair commercial practices. The Italian antitrust authority imposed a fine of €10 million on two Amazon subsidiaries due to concerns surrounding their ‘Subscribe and Save’ option, which enabled customers to arrange for recurring deliveries of frequently purchased items. Italian officials contended that the automatic nature of this feature infringed upon consumer rights.