Tech Giant Faces €3bn Tax Dispute Over Non-EU Sales
Italian tax authorities have accused Amazon of evading €1.2 billion in VAT payments, marking another major European crackdown on Big Tech’s tax practices.
The claim involves sales of goods from China and other non-EU countries through Amazon’s platform between 2019 and 2021, according to sources familiar with the investigation.
Now, Amazon is facing a total claim of €3 billion—including the original tax, penalties, and interest—related to alleged tax fraud. This dispute arises as the EU revamps its VAT collection system for imported goods sold online.
Amazon, which is contesting the claim, declined to comment on the “ongoing investigations” but reaffirmed its commitment to “complying with all applicable tax laws.”
The company also pointed out that it generated over €1.4 billion in direct and indirect tax revenues for Italy’s public funds in 2023.
The tax dispute comes at a time when Donald Trump has criticized the EU’s treatment of US businesses, particularly taking issue with the bloc’s VAT system.
Why is Amazon being targeted?
The dispute centers around imported goods—often valued under €150—sold by third-party sellers on Amazon’s marketplace. This took place during a transitional period when the EU was updating its VAT regulations.
The EU’s VAT reforms, approved in 2017 and fully enforced in 2021, were designed to simplify tax collection while curbing the estimated €5 billion in annual VAT losses from low-value imports.
Under the old system, each seller had to register for VAT in every country where they sold products. The new rules shifted the responsibility to tech companies, making them liable for VAT collection on all sales made through their platforms. Additionally, the EU removed a long-standing tax exemption for imported items under €150, which had previously given foreign sellers an advantage over European businesses.
However, before the EU-wide system came into full effect, Italy passed its own law in 2019, making tech platforms liable for any VAT evasion by third-party sellers. This is the foundation of the current Amazon tax claim.
The Investigation and Findings
Italy’s financial police, the Guardia di Finanza, analyzed 7 billion transactions conducted through Amazon from 2019 to 2021. Their findings suggest that an estimated €1.2 billion in VAT payments was evaded.
Authorities also reported that Chinese sellers accounted for 70–80% of all goods sold online in Italy.
Several months ago, at a meeting in Rome, US companies operating in Italy voiced concerns to then-Commerce Secretary Gina Raimondo. They criticized the unpredictability of Italian tax authorities and accused them of targeting large foreign businesses to generate more state revenue.
