Italy expands web tax to soothe US tensions
In a move aimed at calming US objections that its digital tax unfairly targets American companies, the policy is being reworked to include smaller tech firms by Italy.
Italy is adjusting its web tax policy, expanding it to cover smaller digital firms in an effort to address US concerns that the tax unfairly targets American tech giants. The decision, announced by Economy Minister Giancarlo Giorgetti, aims to defuse Washington’s threat of retaliatory tariffs. Italy first implemented a 3% digital service tax in 2019, focusing on large companies with annual global revenues over €750M, including giants like Meta, Google, and Amazon.
Now, under the proposed 2025 budget, Italy plans to eliminate the revenue threshold to broaden the tax’s reach to smaller companies. This change is expected to generate an additional €51.6M, supplementing the existing €400M in tax revenue. Giorgetti hopes this expansion will address US concerns over discrimination, noting that other EU countries may follow Italy’s lead.
Despite this effort, resistance remains within Italy’s government, as some coalition members argue the tax should focus exclusively on large US tech firms. As global efforts to establish a minimum digital tax remain stalled due to international disagreements, Italy’s adjustments reflect its attempt to balance international relations with economic interests.