Tax authorities in Milan, Italy, have reason to believe that Amazon evaded approximately €130 million ($141.6 million) of taxes in Italy, a source close to the investigation into the company’s practices told Reuters on Friday. According to the same source, investigators had already briefed Milan prosecutors on the matter, though state officials have yet to decide whether to prosecute Amazon based on their suspicions and existing evidence that reportedly exists but hasn’t been publicly disclosed as of this writing. The Seattle, Washington-based tech giant and online retailer dismissed the accusations in a statement seen by Reuters, saying that all of its taxes were paid on time but the annual profits on which they’re based on were historically low because the company made significant investments in the country.
Amazon’s defense seemingly has merit in light of the fact that Italy is one of the beneficiaries of the firm’s expansion efforts on the Old Continent. Following years of increasing its employee headcount, Amazon recently revealed plans to significantly expand its workforce in the European Union over the course of this year as the company said it’s planning to create 15,000 full-time jobs by the end of 2017. However, the extent of the tech giant’s spending in Italy is currently unclear and Italian tax authorities are now possibly suspecting Amazon of artificially lowering or hiding its profits in an effort to pay less tax. The €130 million in taxes that the Seattle-based eCommerce company allegedly evaded were supposed to be paid between 2011 and 2015, a source with knowledge of the matter claims, adding that Amazon recorded approximately €2.5 billion ($2.72 billion) in revenue during that five-year period. It’s currently unclear whether Italian prosecutors will decide to prosecute Amazon as state officials have yet to issue any official comment pertaining to Amazon’s supposed tax evasion.
The latest turn of events marks yet another potential legal problem for Amazon in Europe as the company has recently been hit with a number of antitrust and tax-related charges made by the European Commission and is at risk of paying billions of dollars in fines. An update on the company’s dealings with EU authorities is expected to follow later this year.