Italian prosecutors have launched an investigation to determine whether Amazon shares responsibility for the failure to pay VAT on online sales, which has deprived the state budget of 1.2 billion euros in revenue, sources familiar with the matter said today.

The Milan prosecutor's office and tax police are investigating three managers and Amazon's European branch based in Luxembourg for possible tax fraud on online sales in Italy between 2019 and 2021, sources said, Corriere della Sera reports.

Taking into account fines and interest, Amazon's total bill could rise to three billion euros.

Last July, Italians seized around 121 million euros from Amazon. According to sources, Amazon's algorithm allows sellers from outside the EU, mainly Chinese, to sell goods in Italy without revealing their identity, allowing them to avoid paying value added tax (VAT).

In July last year, Italian financial police provisionally seized around 121 million euros from Amazon's Italian branch based on an investigation by the state prosecutor into possible tax fraud and worker exploitation.