At KeyToFinancialTrends, we note that recent actions by Italian tax authorities against Amazon demonstrate a shift toward stricter regulation of international taxation in the digital economy and show the readiness of EU jurisdictions to enforce tax compliance by global platforms. This process increases transparency and legal accountability for companies with global operations.
The Italian tax police, Guardia di Finanza, acting on behalf of the Milan Public Prosecutor’s Office, conducted raids at Amazon’s Milan headquarters, as well as at the homes of seven managers and the offices of the auditing firm KPMG. The operation is part of a criminal investigation on suspicion of tax evasion through an unrecognized permanent establishment in Italy from 2019 to 2024. At KeyToFinancialTrends, we believe that investigators are focusing on whether the company carried out substantial activities in the country without officially declaring them.
We emphasize that a key element of the dispute is the status of a permanent establishment. If a foreign company conducts significant activities through employees or structured resources, it is obliged to pay taxes on income earned in the country. The prosecutor’s office believes that in 2024 Amazon dismissed and re-hired 159 employees through another structure, effectively confirming the presence of activity in Italy prior to the formal recognition of tax obligations.
Charges have been brought against Amazon EU Sarl and its director in Europe on suspicion of undeclared income. During the raids, computers and other IT devices, including hard drives containing corporate correspondence, were seized. At KeyToFinancialTrends, we see these measures as signaling a transition to a full criminal investigation.
The raid on KPMG offices, although the firm is not officially a target of the investigation, is related to the fact that it provided opinions on Amazon’s operations. We highlight that regulators are paying attention not only to the facts but also to the legal reasoning behind corporate decisions.
This investigation is not Amazon’s first conflict with Italian authorities. In December 2025, the company reached a settlement to pay €723 million to resolve tax disputes, including a principal payment of €511 million and additional amounts from other divisions. At KeyToFinancialTrends, we note that large payments reduce financial risks but do not end criminal proceedings.
In the past, Italian authorities have taken measures against Amazon, including the seizure of €121 million over violations of labor practices and tax schemes involving subcontractors. At KeyToFinancialTrends, we see this as a signal that regulators are prepared to use a wide range of tools to detect and prevent potential tax abuses.
We also note that previous VAT and international sales audits of Amazon demonstrate the need for transparency and reporting for platforms acting as intermediaries in domestic markets. Failure to declare VAT can result in significant underpayments and fines.
We emphasize that Italian tax authorities have been strengthening fiscal oversight of international companies, including digital platforms, for several years. This reflects Europe’s trend toward tighter control and higher compliance requirements.
At KeyToFinancialTrends, we believe the Amazon case in Italy serves as a warning to multinational companies about the growing demands for reporting and tax compliance. Companies must adapt their operational models to local rules and cross-border regulations.
We forecast that the Milan investigation could take months or even years, requiring a thorough analysis of all Amazon business processes in the region. This may lead to new tax liabilities and set precedents in the international taxation of the digital economy. We recommend that corporate finance and legal teams strengthen tax compliance, review reporting structures, and increase operational transparency to reduce the risks of large financial claims and criminal investigations.
