Italy unveils new landmark tax on internet giants

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AFP/The Local - [email protected]
Italy unveils new landmark tax on internet giants
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Italy is to slap global tech giants like Google and Amazon with a three-percent charge under its new tax-focused budget.


This is just one of the tax-collection measures announced in the proposed budget Italy submitted to the European Commission on Wednesday, which the Italian government says aims to curb the country's massive problems with tax evasion, tax avoidance, and the shadow economy.

READ ALSO: Italy's black market is now worth more than €200 billion

The new tax would be applied to companies with sales of over 750 million euros, of which at least 5.5 million euros come from services provided in Italy, according to Italian media reports.

The move would bring around 600 million euros into state coffers annually from 2020, according to Italian finance ministry calculations made last year.

The tax is similar to one launched this year in France, which has generated friction with the United States.

The French measure prompted US President Donald Trump to threaten to retaliate with tariffs on French wines.

 Italian media reported on Tuesday that a Trump administration official had threatened to hit back at Italy with similar levies, after it has already hit many Italian, French and other European products with extra tariffs earlier this month.

READ ALSO: Trump slaps extra tariffs on Italian cheese - but not wine

Italy, like France, has said it would scrap its own digital tax once a new international levy, currently being discussed in negotiations led by the OECD, is put into place.

Under EU law, American tax giants can declare their profits from across the bloc in a single jurisdiction - in practice, most do so in low-tax jurisdictions such as Ireland or the Netherlands.

The French tax has drawn accusations of discrimination from US tech companies such as Google and Apple.

Britain has also announced plans for a tax on tech giants, long accused of exploiting fiscal rules to sharply cut their tax bills despite soaring profits.

Italian prosecutors already regularly demand big tax payments from tech giants such as Google or Facebook.

Earlier this month, Netflix became the most recent international tech giant to be investigated by Italy over alleged tax evasion.


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