Italy’s tax review of Meta: A potential game-changer for the tech sector
The review focuses on whether user registrations should be considered taxable transactions due to data exchange. If successful, Meta may face a €870 million tax bill.
Italy is currently conducting a tax review of Meta, which could have significant implications for the technology sector. The review, expected to be completed by the end of this year, is a result of an Italian audit that argues Meta’s user registrations should be considered a taxable transaction due to the exchange of personal data involved. The audit was initiated by Italy’s Guardia di Finanza (GdF) police and has led to a criminal investigation led by Milan magistrates. The outcome of the assessment phase will determine the course of the investigation, and if the case is successful, Meta may be required to pay a tax bill of around €870 million ($925 million).
According to Sergio Sirabella, an international tax adviser, the success of the GdF’s approach in the Meta tax case would depend on establishing a direct connection between providing free membership to online platforms and the collection of user data. If this link is established, it could prompt a thorough review of how data access by users is handled across the entire industry sector of digital platforms and tech giants.
The European Public Prosecutor’s Office (EPPO) is closely monitoring the Italian case and may pursue similar actions in other European Union countries depending on the outcome. Meta asserts that there is no direct connection between its services and the access to data used by advertisers to target consumers.