Following the French path of the proposal of Ms. Fleur Pellerin, minister for the digital economy, the Italian Parliament could introduce the so-called “web tax” (also known as Google tax). Pursuant to this new tax, services and products sold via internet in Italy should be subjected to the Italian fiscal law. In other words, internet big players should be expected to pay taxes in Italy and to use an Italian VAT for these transactions. At the present moment, this controversial draft rule is pending before the Italian Chamber of deputies.
The issue is due to the fact that the so-called “over the top” IT companies often record the income earned as services provided to another group company, which is often based in a country with a more favorable taxation (such as Luxembourg or Ireland).
The deputy Francesco Boccia, author of this amendment, stated that Italy could collect about one billion euro by the introduction of the web-tax and avoid indirect damages to Italian companies of this sector, which pay a less favorable taxation regime.
Mr. Boccia’s amendment has been criticized by journalists and scholars. First of all it is arguable the mentioned amount of one billion euro, considering that online advertising’s turnover has stood at 260 million euro this year and that this amount is not all taxable. Secondly, Boccia’s proposal should infringe EU rules on competition and common market.
However, during the last days, Apple has come under investigation in Milan assumed the offense of fraudulent tax return. According to the public prosecutor, the company from Cupertino would be responsible for tax evasion amounting to one billion euro.