Italy's Precedent-Setting VAT Moves Against U.S. Tech Giants

Italy has formally issued VAT demands to Meta, X, and LinkedIn, marking a significant tax claim that could affect the European tech landscape. The total claim amounts to 987.1 million euros and challenges the VAT applicability on user registrations. The case may influence broader EU tax policies.

In a groundbreaking move, Italy has issued official VAT demands to major U.S. tech companies Meta, X, and LinkedIn. This unprecedented tax claim could have wide-reaching implications across Europe, as sources familiar with the matter revealed on Wednesday.

The investigation has unveiled that, aside from Meta and X, LinkedIn is also implicated in Italy's VAT pilot case targeting the tech sector. Italy is demanding 887.6 million euros from Meta, 12.5 million euros from X, and approximately 140 million euros from LinkedIn. These claims encompass the period from 2015 to 2022.

Italian authorities assert that user registrations on these platforms should be considered taxable transactions. This assertion could cause a substantial shift in the business models of various industries, as VAT is a harmonized EU tax. Meta expressed its disagreement with the notion of VAT on user access, while LinkedIn withheld comments, and X did not respond to inquiries.

(With inputs from agencies.)