Amazon Faces ‘Trojan Horse’ Allegations in Italy Over Tax Fraud and Customs Violations
Italian authorities have launched a major investigation into Amazon for alleged tax evasion and customs fraud, with prosecutors describing the company’s actions as a “Trojan horse” scheme to import Chinese goods without paying taxes.
Key Takeaways
- Italian police raided Amazon facilities in Milan and Bergamo province
- Approximately 5,000 products were seized including electronics and household items
- Prosecutors allege hundreds of millions in evaded taxes and customs duties
- Investigation may expand to other EU countries
Police Raids and Seizures
On November 24, Italian police from the Guardia di Finanza and customs agency conducted raids at two Amazon locations: a logistics hub in Cividate al Piano (Bergamo province) and the company’s Italian headquarters in Milan. Authorities seized approximately 5,000 products including air fryers, mobile phone covers, pens, small scissors, and toys from the logistics center, while IT equipment was taken from the Milan headquarters.
Police have identified the manager responsible for goods movement within Italy as part of their investigation.
The ‘Trojan Horse’ Scheme Explained
According to court documents cited in the report, Amazon allegedly acted as a “Trojan horse” by facilitating the import of Chinese goods into Italy without paying required sales taxes or customs duties. Prosecutors estimate this scheme has cost the Italian state hundreds of millions of euros.
Milan prosecutors, working with the Monza branch of the Guardia di Finanza, suspect goods are being imported from China into Europe and then moved into Italy through undisclosed channels for distribution via Amazon’s marketplace. This constitutes smuggling and violates EU customs laws.
Amazon declined to comment on Reuters queries but said it was “committed to complying with all applicable tax laws and we cooperate fully with all relevant authorities.”
Expanding EU Investigation
The investigation is expected to extend to other European Union member states. In July, Milan prosecutors presented their findings at Eurojust headquarters in The Hague to counterparts from Germany, France, the Netherlands, Poland, Spain, Belgium, Sweden, and Ireland.
Three sources indicated the number of products involved could reach half a million, with dozens of Italian companies—many believed to be fronts for Chinese entities—participating in the scheme.
Background and Legal Context
This case represents a new line of inquiry stemming from an earlier investigation into alleged €1.2 billion tax evasion. In that case, Milan prosecutors examined three managers and Amazon’s Luxembourg-based European unit over alleged tax fraud related to Italian online sales between 2019 and 2021.
Prosecutors believe Amazon’s algorithm enables goods from non-EU sellers, predominantly Chinese, to be sold in Italy without proper supplier identification, helping them avoid VAT payments. Under Italian law, platforms are jointly liable for unpaid taxes by non-EU sellers.
Italy’s tax agency has submitted a settlement proposal to Amazon regarding the original case, with the company required to respond by December.
Separately, the European Public Prosecutor’s Office has opened its own investigation into Amazon’s accounts from 2021-2024 following new EU rules that imposed stricter sales tax obligations on marketplaces.
