Milan prosecutors requested criminal trial for Amazon (AMZN.O) and four executives over alleged $1.4 billion tax evasion, marking unprecedented legal action despite prior settlement 1.
The move breaks from Italy’s established practice of closing criminal investigations once companies settle tax disputes with authorities.
Key Takeaways
- Amazon faces trial despite paying $527 million settlement in December
- Prosecutors allege algorithm enabled VAT evasion by non-EU sellers
- Case could threaten Amazon’s European business model
Unprecedented Legal Action
The case represents a departure from Italy’s typical approach to international tax disputes. Previously, criminal investigations were routinely closed after companies reached settlements with the Revenue Agency 1.
Amazon agreed in December to pay 527 million euros, including interest, to settle the original tax dispute. However, Milan prosecutors chose to pursue criminal charges regardless 2.
Algorithm-Enabled Tax Evasion
According to charges reviewed by Reuters, Amazon’s algorithm and operating models enabled sales in Italy by tens of thousands of non-EU sellers without disclosing their identities. This allegedly helped Chinese and other foreign sellers avoid paying value-added tax between 2019 and 2021 1.
Under Italian law, intermediaries offering goods for sale are jointly responsible for unpaid VAT by non-EU sellers operating through their platforms. Milan prosecutors named the Italian Economy Ministry as the offended party 1.
Broader European Implications
If upheld in court, the allegations could pose a significant threat to Amazon’s business model across Europe. VAT is a harmonized EU tax, meaning similar cases could emerge in other member states 1.
The company currently faces multiple investigations in Italy. The European Public Prosecutor’s Office is investigating similar alleged offenses for 2021-2024, while Milan prosecutors are running two additional probes involving Chinese imports and potential undeclared permanent establishment 1.
Company Response and Market Context
Amazon was not immediately available for comment on the trial request. Following the December settlement, the company said it would “forcefully defend its position on the potential ungrounded criminal case” 1.
The company previously criticized Italy’s regulatory environment, stating: “Unpredictable regulatory environments, disproportionate penalties, and protracted legal proceedings are increasingly affecting Italy’s attractiveness as an investment destination” 1.
Legal Timeline and Outlook
A preliminary hearing judge will now schedule proceedings to decide whether to indict the defendants or dismiss the case. The trial request, signed by prosecutor Elio Ramondini, is pending before judge Tiziana Landoni 3.
This case highlights growing regulatory pressure on major tech companies across Europe as authorities seek to close tax avoidance loopholes and ensure fair competition with domestic businesses.
Not investment advice. For informational purposes only.
References
1Emilio Parodi (March 12, 2026). “Exclusive: Italian prosecutors seek trial for Amazon, four execs over alleged $1.4 billion tax evasion”. Reuters. Retrieved March 12, 2026.
2“Amazon Faces Trial in Italy Over Alleged $1.4 Billion Tax Evasion” (March 12, 2026). Global Banking and Finance. Retrieved March 12, 2026.
3“Milan prosecutor requests trial for Amazon and four of its managers” (March 12, 2026). ANSA. Retrieved March 12, 2026.