Italy will implement a planned 3% ‘web tax’ in 2020

The Italian web tax will be applied to companies with annual revenues worth at least 750 million euros and digital services exceeding 5.5 million

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Italy and fellow European Union members have long complained about the way Facebook, Google and other internet giants collect huge profits in their countries but pay taxes of a few million euros at most.

 

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Digital companies shift earnings to low- or no-tax locations such as Ireland and international treaties protect them against paying tax in countries where they do not have what is termed a “permanent establishment”.

Profits have to be taxed where they are made,” Gualtieri told a parliamentary hearing.

In Rome on Tuesday to present a production partnership with Italy’s biggest commercial broadcaster Mediaset, Netflix Chief Executive and founder Reed Hastings said the U.S. video streaming service planned to open offices in Italy and pay taxes in the country.

 

Internet giants collect huge profits, but pay minimal taxes as they shift earnings declarations to low-tax nations

The scheme is expected to yield about 600 million euros ($660m) each year and will apply to companies with annual global revenues worth at least 750 million euros ($830m) and digital services exceeding 5.5 million euros ($6m) in Italy.

The plan is broadly in line with proposals from the Paris-based Organisation for Economic Cooperation (OECD), which last week urged governments to redraw rules for taxing global giants.

The Italian web tax will be applied to companies with annual revenues worth at least 750 million euros and digital services exceeding 5.5 million.

Rome is struggling to find resources to avoid a rise in sales tax worth some 23 billion euros ($26bn), due to kick in from January, which could hurt already weak domestic demand.

 

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