Amazon Italy in a storm as €121m seized for tax fraud

Worker exploitation forms basis for latest action against Big Tech

Trade

Milan’s Guardia di Finanza has carried out an emergency preventive seizure of about €121 million from Amazon Italia as part of an investigation led by prosecutors Paolo Storari and Valentina Mondovì. The charge? Tax fraud, a crime that continues to cast a shadow over the business practices of large multinationals.

The investigation focuses on an alleged labour exploitation scheme called ‘labour tanks’ – a mechanism involves companies contract out their logistics services to cooperatives, consortia and filter companies, thus securing very competitive rates. However, these irregular practices bring with them the serious problem of labour exploitation, giving what are effectively full time employees the same terms and conditions as contractors.

This is not the first time similar allegations have surfaced. Previous investigations have involved other logistics and transportation giants from DHL, GLS, Uber, Lidl, Esselunga, GS of the Carrefour group and others. Even in those cases, the system involved the use of filter companies that formally hired workers but failed to guarantee social security and welfare contributions.

This investigation has revealed a disturbing picture of labour exploitation, with workers forced to switch from one company to another, all formally separate but part of the same tax evasion scheme.

According to the Milan Public Prosecutor’s Office, the seizure of €121 million was justified due to the fact that, the fraudulent mechanism is allegedly still in place and responsible ffor the exploitation of workers ad significant losses to the treasury.

The Internal Revenue Service noted that the relationships with suppliers considered critical continued into 2023, with the issuance of additional invoices for taxable income of more than €135 million and VAT of nearly €30 million.

Prosecutors argued that Amazon Transport S.r.l. has failed to adopted safeguards for workers or “any other management mode aimed at interrupting the illicit effects of the fraudulent mechanism in which it is directly involved in the pre-eminent role of principal and direct beneficiary both of the services performed in its favour by individual workers and of the undue and substantial pecuniary benefits obtained to the detriment of the Treasury, with a total value of €121.466,315.12… in relation to the years between 2017 and 2022”.

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