Full Breakdown
Amazon Settles Tax Dispute with Italy Amid Ongoing Investigations
12/12/2025, 12:59:00 PM
Settlement Overview
Amazon has reached a settlement with Italy's tax authorities, agreeing to pay €723 million ($835 million) to resolve allegations of tax evasion and labor law violations. This settlement includes €511 million to be paid in the coming months, alongside €212 million already paid to settle a separate tax dispute. The investigation, led by Milan prosecutors, focused on Amazon's logistics services unit and its alleged circumvention of Italian labor and tax laws, particularly concerning the use of cooperatives and limited liability companies to supply workers. This practice reportedly resulted in the avoidance of Value-Added Tax (VAT) and reduced social security contributions.
Ongoing Investigations
Despite the settlement, Milan prosecutors have expressed their intention to continue their criminal investigation into Amazon. They suspect the company of evading approximately €1.2 billion in taxes from 2019 to 2021. Prosecutors are also pursuing two additional investigations: one concerning alleged tax evasion from 2021 to 2024, and another related to customs and tax fraud involving imports from China. The prosecutors expect to conclude their current investigation early next year.
Amazon's Position
Amazon has denied any wrongdoing, asserting that the settlement reflects its commitment to cooperating with Italian authorities. The company emphasized its significant investment in Italy, amounting to over €25 billion over the past 15 years, and its employment of more than 19,000 people in the country. In response to the regulatory environment, Amazon warned that Italy's attractiveness as an investment destination could be compromised by "unpredictable regulatory environments, disproportionate penalties, and protracted legal proceedings."
Criticism & Opposition
The ongoing investigations and the settlement have drawn criticism from various quarters. Milan prosecutors have publicly disagreed with the settlement reached between Amazon and the Italian tax collection agency, indicating a lack of consensus on the resolution of the tax issues. This discord highlights concerns about the adequacy of the settlement in addressing the alleged tax evasion and labor violations.
Verbatim Quotes
- “We will defend ourselves vigorously against any criminal proceedings, which we believe to be unfounded.” — Amazon Spokesperson
- “Unpredictable regulatory environments, disproportionate penalties, and protracted legal proceedings are increasingly affecting Italy's attractiveness as an investment destination,” — Amazon Spokesperson
What's Next
As the investigations continue, the Milan prosecutors are expected to finalize their findings early next year. The outcomes of these investigations could have significant implications for Amazon's operations in Italy and its broader business strategy in Europe.
