Amazon’s (AMZN) shares rose nearly 2% at the start of trading on Monday despite news of a police raid on two of the e-commerce heavyweight’s sites in Italy. The raid was tied to a government investigation into an alleged €1.2 billion (now about $1.38 billion) tax evasion case.
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According to Reuters, Italian police raided an Amazon logistics hub in Bergamo, a city in Lombardy, northern Italy, and Amazon’s Italian base in central Milan. The raid was part of the Italian tax police’s investigation into suspected smuggling of Chinese goods into the country.
At the hub, the police seized more than 5,000 products, including toys, air fryers, and small scissors. At the headquarters in Milan, they confiscated IT equipment, the outlet reported, citing sources familiar with the matter.
Sellers of goods in Italy, including those marketed through an intermediary, are required to pay import value-added tax (VAT). Local laws also make it possible to hold intermediaries culpable in case of non-payment by international sellers.
Amazon Faces Italian Tax Scrutiny
Since 2021, Italian authorities have been investigating Amazon in relation to the tax evasion case. Earlier this year, it became public that prosecutors were grilling three managers of the e-commerce company in the country in connection with the case.
The case relates to defaults on online sales payments in the European country made between 2019 and 2021. Sources have told the outlet that the tax bill could expand up to €3 billion ($3.5 billion), with the addition of penalties and interest.
In a different case, Italian authorities in June last year confiscated approximately €121 million (now about $139 million) from an Amazon unit in the country. The case was also in relation to a probe into suspected tax evasion. However, it also included concerns about possible labor law violations.
Is Amazon a Buy, Hold, or Sell?
On Wall Street, Amazon’s shares continue to command a Strong Buy consensus rating from analysts. This is based on 40 Buys and three Holds assigned by analysts over the past three months.
Moreover, at $294.71, the average AMZN price target implies nearly 34% upside from the current trading level.
See more AMZN analyst ratings here.
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