Italy drags Meta, X, LinkedIn into €1B+ VAT showdown: free sign‑ups now taxable?
reuters.com
reuters.com
> The digital services tax (Digital Service Tax) is applied at a rate of 3% on revenues deriving from the provision of services on a digital interface for targeted advertising to users of that interface, for the provision of a multilateral digital interface that allows users to connect and interact with each other, also for the purpose of facilitating the direct supply of goods or services for the transmission of data collected from users and generated by the use of a digital interface.
> In practice, taxation applies to digital advertising on websites and social networks, access to digital platforms, fees received by the operators of such platforms, and also the transmission of data “collected” from users. Revenue is taxable if the user of the digital service is located within the territory of the State. For online advertising services, the user is considered to be located in the territory of the State if the advertisement appears on their device when it is used in the territory of the State. The location of the device in Italian territory is determined on the basis of its IP address.
> Businesses that generate revenue in Italy from the above-mentioned digital services and that, during the calendar year preceding the one in which the tax liability arises, generate a total revenue of not less than €750 million anywhere in the world, either individually or as a group, are subject to the digital tax.
It seems for me a fair tax for corporations that take advantages of data collected to provide a service that someone pays (advertisements).
How much sales tax are Facebook customers paying on their metadata purchases today? What component of that sale price or sales tax are being distributed back to the users or jurisdictions whose data was harvested? Is that a just economic outcome for everyone that isn’t Facebook?
I don’t know what the right answer is here, but I absolutely recognize the plausibility of the sort of claim being leveled here — even if tech would rather not. It’s basically just a proposed tariff on user exports from Italy, after all!
(Personally, I am looking forward to someone someday making a courtroom argument that providing free access to Facebook services without declaring a value, and without offering payment for use of one’s metadata as an alternative to unwanted services, is equivalent to valuing access those services at $0 and so back pay is owed their users-as-contractors. No one’s had the courage yet, but it’s nice to see we’re moving in the direction that might produce such outcomes.)
It's quite clear there is a transaction - with value - and a large part of these companies valuations and revenue is directly driven by the number of users.
( I am not a tax lawyer ).
as any rational entity should
Stop trying to rebrand selfishness as rationalism.
I also vote for parties that run on raising taxes on wealthy individuals like myself. It is a membership fee for living in a functioning society.
In more corporate terms, my user sentiment has dropped given the way US companies have been trying to avoid paying their fair share.
I can tell you however, that Bezos and his oligarch friends booking out a Venice that is sinking from climate change, while people suffer without health insurance and we still don't have high speed rail as built out as it needs to be is definitely not my understanding of fair.
And again, I say this as somebody that I also think should be taxed more. To live this well while so many people and projects need the resources more is unconscionable.
Leave the implementation details to the experts and elected officials. It's clear which direction we need to move in though.
Fair would be Bezos and his ilk getting the Jack Ma treatment, oligarch fortunes reclaimed by the people and used for solving the climate crisis. But we won't get fair. Meanwhile greedy little moneygrabbers argue over some little tax. Ridiculous.
Cherry-picking the upside while avoiding the downside is parasitic behavior.
It's disheartening to see the replies to your comment on this forum that these companies are doing something evil, and that these comments are arguing in favor of higher taxation to "fix" some sense of "fairness".
I personally don't think that governments use collected money generally more wisely than private hands - if they did, it would stand to reason that they should collect even more in order to continue allocating it so effectively, no? The whole private marketplace would be considered inefficient, correct? I hope we can agree (as users of a startup focused forum after all) this is not the case outside of a few tightly defined functions.
They want to make these companies pay a "fair" share, but none can define it. It appears to be "more" until no injustice for others exists along axes such as "healthcare outcomes", "housing outcomes", etc, regardless of people's choices. For example, one commenter gave the juxtaposition of Jeff Bezos throwing a Venetian wedding while people in the world lack health insurance as a case study for unfairness. What volume and kind of healthcare services are these people owed specifically? In the extreme, are experimentally surgeries that can only be provided by one living human counted as necessary? How much would it cost to pay him to provide it constantly, and what happens when he physically can't provide his service to everyone?
Where is the line drawn - because it absolutely matters. Would taxing Jeff more allow you to provide the services you envision? Where is the math showing which services could be provided, for how long, at what taxation rate, and for how many lives saved so we can actually make informed decisions? Until we have this data, it sounds more like this line of thinking comes from a hate for him rather than a desire to help people.
I live in a more remote part of the united states than probably 90% of this forum does: along the axes of "distance to a downtown", "health outcomes", "dental outcomes", "pollution exposure", "likelihood of getting into a car accident", and even "life expectancy" my result will likely be worse than someone in Brooklyn.
While I will be "poorer" on many metrics than someone who made the choice to move to Brooklyn, I would personally consider myself "richer" on the axes that matter to me.
No amount of taxing Meta will plug every gap between individual's outcomes nor bring general prosperity to a given nation, Meta paying even 100% of its income to my particular state will not help convince more truly-competent doctors to live near me nor inspire the ambitious people found in Brooklyn to come here to provide their quality services to me instead in order for me to have the same "quality of life". My outcome will always remain different than others'.
Personally, I think we should minimize taxes as much as possible to reduce the less-efficiently-allocated capital deployed by the government, and have clear goals on missions for equitable outcomes and clear plans for their costs.
To me, a sales tax on free signups really does seem as you say - a shakedown by a sclerotic leadership who want to feed their own operations with no clear plan to use the money well. Somehow they are empowered by supportive people who truly will not see an effective benefit from this extortion.