Italian Authorities Seize €121 Million from Amazon for Alleged Tax fraud and Worker Exploitation
Italian financial authorities have seized €121 million from Amazon’s Milan branch following accusations of tax fraud and worker exploitation. The investigation, led by the Milan prosecutor’s office, uncovered an alleged illegal subcontracting scheme, according to the state-run ANSA news agency.
The probe centers on the use of “labour reservoirs,” a practice where large companies allegedly subcontract logistics services to other firms and cooperatives to reduce labor costs and tax liabilities. The authorities claim that Amazon utilized an “illicit mechanism of invoices” for non-existent transactions under fake labor supply contracts, leading to the creation and use of false documents.
Prosecutors detailed a complex “labour supply chain” where labor relations were mediated by “filter” companies, which in turn employed various cooperative companies. These cooperatives allegedly avoided paying VAT as well as social security and welfare charges.
In response to the allegations, Amazon stated to Euronews via email: “We comply with all applicable laws and regulations where we operate, and require companies who work with us to do the same. We hold ourselves and our partners to the highest standards, and have an established Supplier Code of Conduct that must be followed in order to work with us. We’ll continue to help the relevant authorities with their enquiries.”
Amazon is the latest major company to be targeted by Italian prosecutors in similar investigations. Other companies, including DHL, Uber, and Lidl, have faced scrutiny for comparable issues. In December, Airbnb settled a four-year Italian tax dispute by agreeing to pay €576 million.
Earlier this year, Amazon was also fined €10 million by Italy’s antitrust authority over its Subscribe and Save option, which allowed customers to set up recurring deliveries. Officials claimed that the automatic nature of this function infringed on consumers’ rights.