Italian tax authorities have accused Amazon of evading €1.2 billion in VAT payments, marking the latest crackdown by European regulators on US tech giants operating in the region.
The claim, linked to sales of goods from China and other non-EU countries through Amazon’s marketplace between 2019 and 2021, brings Amazon’s total tax liability to €3 billion, including interest and penalties. The investigation coincided with the EU’s overhaul of its VAT collection process for online sales, aiming to curb tax evasion.
Amazon has denied any wrongdoing and is contesting the claim but has not provided further comments.
The dispute arises from Amazon’s role as an intermediary for third-party sellers, particularly those shipping low-value goods (under €150) to Italian consumers. Before the EU implemented its new VAT framework in 2021, Italy passed a law in 2019 holding digital platforms responsible for tax evasion committed by their sellers, forming the basis of the current claim against Amazon.
Authorities allege that between 70% and 80% of goods sold online in Italy during the period originated from Chinese sellers. The Italian financial police, Guardia di Finanza, reviewed seven billion transactions conducted via Amazon’s platform, concluding that a significant portion of VAT was unpaid.
The tax claim adds to growing tensions between the EU and the US over taxation policies. Former US President Donald Trump previously criticized the EU’s VAT system, accusing it of unfairly targeting American businesses. At a recent meeting in Rome, American companies raised concerns over Italy’s unpredictable tax enforcement, arguing that foreign corporations are disproportionately targeted to bolster the government’s revenue.
Despite reforms aimed at closing loopholes in VAT collection, European regulators continue to scrutinize large digital platforms. The case against Amazon underscores the challenges facing multinational tech firms as they navigate differing tax regulations across European jurisdictions.
