MILAN — The Italian subsidiary of Amazon is under investigation by the country’s tax police for suspected tax evasion.
According to media reports, the investigations focus on five years, from 2009 to 2015, when Amazon’s Italian subsidiary is believed to have allegedly avoided paying tax of 130 million euros, or $141.66 million at current exchange rate. During the period, the company generated a turnover of 2.5 billion euros, or $2.72 billion.
According to the Italian tax police, Amazon shifted its revenues, generated in the Italian market, into the parent company based in Luxembourg, which is considered a tax haven.
“We pay taxes in each country we operate. Taxes are based on profits, not revenues, and our profits remained small due to the big investments and due to the fact that we are directed to retail,” Amazon stated on Friday. “We have invested more than 800 million euros [$872 million] in Italy since 2010 and we currently employ more than 2,000 people with permanent contracts.”
The Italian tax police gave the results of its investigations to both the Italian public prosecutor Adriano Scudieri and to the Italian Revenue Agency, which will start investigating Amazon.
Two other American web giants, Apple and Google, have faced the same problems with the Italian tax authorities.
Last year, Apple paid the Italian Revenue Agency a sum of 318 million euros, or $350 million at average exchange rate, while Google is expect to close its tax dispute in the coming weeks. In 2016, the Italian tax police presented a claim against Google for the nonpayment of 227 million euros, or $250 million, in taxes between 2009 and 2013.
In December, Amazon said it’s investing 65 million euros, or $67.8 million, to open a new logistics center in Vercelli, in the Piedmont region. The new hub, which will span more than 1.1 million square feet, will be inaugurated next fall and will employee 600 people. Amazon, which debuted in Italy in 2010 and invested more than 450 million euros, or $469.5 million, in the country, already operates a logistics center in the Emilia-Romagna region, as well as an urban logistics hub in Milan dedicated to the Amazon Prime Now service that debuted in 2015. Another logistics center is opening in Passo Corese, about 25 miles from Rome, next year and it will employ 1,200 people.