Milan Prosecutors Seek Amazon Trial on 1.38 Billion Euro VAT Evasion

Milan prosecutors have requested a criminal trial for Amazon's Luxembourg-based European unit and four of its managers over allegations of value-added tax evasion totaling approximately 1.38 billion euros on online sales in Italy from 2019 to 2021. The move comes despite Amazon reaching a settlement with Italian tax authorities in December, paying 527 million euros including interest to resolve the underlying dispute, marking an unprecedented departure from past practices in similar cases involving multinational companies.

The allegations center on Amazon's marketplace platform, where prosecutors claim the company's operating models and algorithms enabled tens of thousands of non-European Union sellers, primarily from China, to sell goods in Italy without properly disclosing their identities. This, authorities contend, allowed the sellers to evade VAT obligations, for which e-commerce platforms like Amazon are jointly liable under Italian law enacted in 2019. That legislation holds intermediaries responsible for collecting and remitting VAT on sales of imported goods from outside the EU, a rule that aligned with broader European Union reforms simplifying cross-border e-commerce...