Amazon (AMZN) saw its shares climb nearly 2% on Monday morning, defying news of police raids on two of its Italian locations. The raids are linked to a government investigation into alleged tax evasion amounting to €1.2 billion (approximately $1.38 billion).
The Italian tax police, according to Reuters, targeted an Amazon logistics hub in Bergamo, Lombardy, and Amazon's Italian headquarters in Milan. The investigation centers on suspected smuggling of Chinese goods into Italy.
During the raids, authorities seized over 5,000 products from the Bergamo hub, including toys, air fryers, and scissors. IT equipment was confiscated from the Milan headquarters, sources familiar with the matter revealed.
Under Italian law, sellers – including those using intermediaries – are obligated to pay import value-added tax (VAT). Intermediaries can also be held liable for non-payment by international sellers.
Amazon Under Italian Tax Scrutiny
Italian authorities have been investigating Amazon's tax practices since 2021. Earlier this year, it was revealed that prosecutors questioned three Amazon managers regarding the case, which concerns unpaid online sales taxes in Italy between 2019 and 2021.
Sources suggest the total tax bill, including penalties and interest, could reach €3 billion ($3.5 billion). This isn't the first time Amazon has faced scrutiny in Italy; in June 2022, Italian authorities seized approximately €121 million from an Amazon unit in a separate case.
What Does This Mean for Amazon?
Despite the ongoing investigation and raids, the market reaction suggests investors remain confident in Amazon's long-term prospects. The company's ability to navigate regulatory challenges and maintain growth will be closely watched in the coming months.
- Italian police raided Amazon sites over alleged tax evasion.
- The investigation focuses on suspected smuggling of Chinese goods.
- Amazon shares rose despite the news.