Italian Tax Police Search KPMG Offices in Amazon Permanent Establishment Probe [IT]

Italian Tax Police Search KPMG Offices in Amazon Permanent Establishment Probe [IT]

Italy's Guardia di Finanza raided Amazon's Milan headquarters and KPMG's offices on 12 February 2026, investigating whether the tech giant maintained an undisclosed permanent establishment in Italy from 2019 to 2024 and consequently owes additional taxes.

Tax police also searched the homes of seven Amazon managers, seizing computers, hard drives, and employee communications as evidence of business operations during the period under investigation.

KPMG's offices were searched because the firm provided opinions on the actions being investigated. The firm is not itself under investigation, according to sources familiar with the matter.

Already Paid €510 Million

This investigation represents a new strand of broader tax scrutiny. In December 2025, Amazon agreed to pay €510 million to settle a separate tax dispute covering 2019 to 2021, a period during which Milan prosecutors suspect approximately €1.2 billion in tax evasion.

Italian prosecutors are running two additional investigations into Amazon: suspected tax evasion for 2021 to 2024, and suspected customs and tax fraud involving Chinese imports.

Staffing Patterns as Evidence

Investigators noted that in 2024 alone, Amazon EU Sarl terminated and then rehired 159 workers assigned to another Amazon entity, presenting this as evidence of substantive business activity in Italy. The workforce management structure matters because it signals operational control and presence, both relevant to permanent establishment determinations.

The timeframe is particularly notable. The investigation covers 2019 to 2024, predating Amazon's August 2024 agreement with Italian tax authorities to begin paying taxes in the country.

What This Signals

The involvement of KPMG's offices in the raid suggests Italian authorities are scrutinising the evidentiary basis for tax opinions provided to clients on complex jurisdictional matters. For practitioners advising multinationals, this underscores the importance of robust documentation for permanent establishment positions, particularly regarding employment arrangements and operational footprints.

Italy's 2026 Budget Law, effective 1 January 2026, has introduced increased depreciation allowances and targeted amendments to tax relief mechanisms. These changes arrive amid heightened scrutiny of multinational operations by Italian tax authorities.

The raid occurred approximately two months after the December 2025 settlement, indicating Italian authorities are pursuing multiple investigative tracks into Amazon's tax compliance across different fiscal periods simultaneously.