The e-commerce industry has one of the highest tax contribution levels in Italy

According to research conducted by Luiss Business School in Rome, supported by Amazon, both traditional retail and e-commerce are characterised by some of the highest levels of taxation in Italy, in relation to the value added created [1]. In 2022, taxation levels averaged around 20% overall, with a slightly higher value for e-commerce (21%) compared to traditional retail (19%). Moreover, between 2016 and 2022, the tax contribution from retail increased, particularly for online trade. The study highlights that retail is characterised by low operating profit margins, resulting in a relatively low tax contribution in relation to revenues (median value around 3%). It also underscores the role of digital intermediaries in commerce, due to the significant amount of indirect taxes they collect.

The research examined how the Italian tax system applies to businesses, aiming to determine if the tax burden is evenly distributed across sectors. It conducted an economic and financial analysis to evaluate the impact of tax contributions and analysed key indicators from the financial statements of the top 3,000 companies operating in Italy, split by industry.

The findings show that the 50 companies with the highest tax contributions in Italy collectively paid €3.13 billion in direct taxes and social security contributions to the Italian government in 2022. On average, each of these top 50 corporate taxpayers contributed around €62 million in taxes. Amazon's total direct tax payment of over €321 million in 2022 places it among Italy's top 50 companies in terms of total tax contribution to the government. Amazon’s contribution aligns with the research findings that its overall tax burden relative to revenues is on par with other businesses operating in the retail sector.

As shared in our economic impact blog, during 2022 (the base year of the research) our total tax contribution – combining directly incurred and indirect taxes – amounted to over €1.147 billion (+53% vs. €751 million in 2021), compared to a total revenue from Amazon’s business activities in Italy amounting to over €9.44 billion (+8% vs. €8.75 billion in 2021). This can be broken down into:

• Our total directly incurred taxes, which amounted to more than €321 million (+24% vs. €258 million in 2021). Employer taxes accounted for a large proportion of these. Other direct taxes included corporate income tax, taxes paid for land acquisition or construction, digital service tax, and import duties.
• We collected an additional €826 million in indirect taxes (+68% vs. €493 million in 2021) as a result of our business activities in Italy. These are taxes we collect and submit from our customers, employees, and other third parties, including VAT and the taxes paid by our employees. The increase in 2022 was largely driven by net VAT. From 1^st July 2021, Amazon has been collecting and submitting Italian VAT on transactions involving overseas sellers. This VAT is calculated by Amazon and collected from customers at checkout.

[1] Added value is the measure of the increase in value that occurs in the production and distribution of goods and services; that is, the difference between the value of production and intermediate costs.