Amazon to pay $118 million to close tax litigation issue in Italy

Amazon has agreed to pay 100 million euros ($118 million) to close a tax litigation issue in Italy, the country's tax collection agency said Friday.

The US online commerce giant will pay the sum through its Italian and European Union subsidiaries, the Agenzia delle Entrate said in a statement.

The agreement will put an end to ongoing tax investigations against Amazon led by Milan prosecutors and the Guardia di Finanza financial police about the 2011-2015 period, the statement added.

Amazon also agreed to reopen talks on "preemptive agreements" ensuring "fair taxation in Italy" of the company's activities in the country, the Agenzia delle Entrate said.

On its part, Amazon Italy said a deal was reached "on issues related to the past," allowing the company to "remain focused on offering a great buying experience to our customers in Italy."

Amazon added it created a local subsidiary in May 2015 to "register all earnings, expenses, profits and tax due in Italy" from its retail sales business.

Earlier this year, Italy's tax revenue agency settled another tax litigation case with another leading US internet company, extracting 306 million euros from Google.

Friday's deal also followed increased Italian regulatory scrutiny on Amazon in the wake of a November 24 Black Friday strike at a company warehouse where workers demanded better conditions.

Last week, the Italian Authority for Communications ordered the online retailer to register as a "postal service," a status that could make Amazon's Italian employees eligible for better contracts.