Italy to change web tax in bid to overcome US objections

Italy has extended its internal tax on digital services to small and medium-sized businesses (SMEs) to try to overcome objections from the United States that the tax is discriminatory, Economy Minister Giancarlo Giorgetti said on Thursday.

Washington has threatened to impose unilateral digital tax tariffs in Europe as they mainly target US tech companies such as Meta Platforms, Google and Amazon.

Italy introduced a 3% tax on revenue from internet transactions in 2019 for digital companies with annual sales of at least 750 million euros ($809 million) if at least 5.5 million are made in Italy.

Now, as part of the government's 2025 budget, the Treasury plans to remove these minimum conditions, aiming to raise €51.6 million on top of current revenue of €400 million.

Confirming an earlier Reuters report, Giorgetti said increasing the number of companies forced to pay the tax was aimed at avoiding clashes with Washington.

“This eliminates the element of 'discrimination' underlying the US complaint,” Giorgetti said.

Sources told Reuters this week that the United States had renewed calls for Italy to repeal its network tax.

During Donald Trump's first term as US president, Washington said it was prepared to counter the Italian tax.
Now that Trump has won a second term, Italy's network tax is likely to remain a sensitive issue for Prime Minister Giorgia Meloni, an Italian government official said.