We investigate whether the geographic concentration of non-EU immigrants in the various Italian provinces affects labour tax avoidance (LTAV) practices adopted by firms located in the same provinces, as well as in the neighbouring provinces, and operating in construction and agriculture industries that mostly employ immigrants in Italy. For this purpose, we develop a LTAV proxy based on the financial accounting information of a sample of 993,606 firm-years disseminated throughout 108 Italian provinces over the period 2008-2016.Our results, based on a Spatial Durbin Model panel regression, reveal a statistically significant positive association between non-EU immigrant concentration and LTAV at province-level as well as the presence of spillover effects among neighbouring provinces. Our findings are robust to several additional analyses, including instrumental variable estimations to account for possible endogeneity.Our study provides empirical support to previous structuralist or marginalization theories holding that socio-economically marginalized groups, such as non-EU immigrants, are more likely to be involved in undeclared work and/or other labour exploitation practices, which could underlie our LTAV outcomes. Furthermore, it supports the need for tax authorities to strengthen controls and labour inspections, especially in those contexts where non-EU immigrants are mostly employed. On the other hand, a greater social integration and recognition of rights of immigrants may help to alleviate their situation of weakness that makes them more vulnerable to labour exploitation practices. Finally, effectively tackling LTAV, associated with the underemployment of immigrants, may prevent its negative effects for society arising from the reduction of public resources to sustain the social welfare and finance public goods and services.