Amazon said Wednesday it had reached a settlement with prosecutors in Italy on a 1.2-billion-euro tax-evasion case, with Italian media reporting the online retail giant would pay out 511 million euros ($596 million).

Prosecutors in Milan accused the US firm of failing to pay value-added tax due on transactions by third-party sellers after Italy passed a law in 2019 making e-commerce businesses responsible for VAT owed on all sales from outside the European Union.

Amazon denied wrongdoing, but said in a statement the settlement ‘reflects our commitment to working constructively with Italian authorities’.

In February, when the case was made public, a source in Italy’s financial crimes police told AFP the total claim against the company could rise to as much as three billion euros, including penalties.

Amazon did not give the amount of the settlement, but Italian media reports put it at 511 million euros.

The company underlined that it is ‘among the top 50 taxpayers in Italy and one of Italy’s largest foreign investors’, saying it had invested more than 25 billion euros in the country in the past 15 years.

It added it would ‘forcefully defend’ itself if prosecutors pressed criminal charges.

The investigation covers a three-year period, from 2019, when Italy’s law was passed, to 2021, when the EU adopted reforms simplifying e-commerce tax regulations across the bloc.