Italy's Bold Tax Challenge: VAT Battle with U.S. Tech Giants

Italy has issued substantial VAT tax demands to major U.S. tech companies Meta, X, and LinkedIn. This unprecedented pilot case, involving alleged tax fraud, aims to redefine taxable transactions in Europe's tech sector. The outcome could influence tech business models EU-wide due to harmonized VAT rules.

In a bold move, Italy has issued significant VAT tax demands to U.S. tech titans Meta, X, and LinkedIn. According to four sources with direct knowledge, this unprecedented case targets an alleged tax fraud scheme and may have wide-reaching implications across the European Union.

The Italian government claims Meta owes 887.6 million euros ($961 million), X 12.5 million euros, and LinkedIn around 140 million euros. The claims cover the years set to expire, namely 2015 and 2016, amid a backdrop of trade tensions between the EU and U.S. administration under President Donald Trump.

This case is pivotal as it challenges the current business models of tech companies, suggesting user registrations with these platforms imply taxable transactions. The outcome could ultimately compel a reassessment of how businesses link free services to user data exchange in the EU.

(With inputs from agencies.)