(CTN News) – The VAT committee of the EU Commission is currently examining a tax dispute between Italy and Meta, the parent company of popular platforms like Facebook, Instagram, WhatsApp, and Oculus.
Milan prosecutors have initiated an investigation that could potentially result in Meta facing a tax liability of €870 million.
The crux of the issue revolves around whether Meta’s user registrations, which involve the exchange of personal information and are considered non-financial transactions, should be subject to taxation. Meta argues against the application of sales tax on the provision of online platform access.
The EU VAT committee’s assessment, while not legally binding, carries significant weight and could have far-reaching implications for both the ongoing criminal investigation and the legal challenge.
The committee’s decision has the potential to shape the trajectory of the case and may also impact other multinational internet platforms that operate on similar access-for-data models, as well as other EU member states.
If Italy successfully implements VAT on Meta’s services, it could set a precedent that affects not only Meta but also other technology firms operating within the country.
Italy has been actively pursuing tax claims against companies like Airbnb and other technology giants, indicating a broader effort to ensure fair taxation in the digital economy.
This move by Italy reflects a growing trend among governments to address the tax challenges posed by digital platforms and ensure that they contribute their fair share to the countries in which they operate.
Overall, the outcome of this tax dispute and the decision of the EU VAT committee could have significant implications for the taxation of digital platforms and the broader digital economy in Europe.
It could potentially lead to changes in how these platforms are taxed and could prompt other countries to follow suit in their efforts to ensure fair taxation in the digital realm.