Italy's tax authorities have issued formal demands totaling nearly $1.1 billion to U.S. technology firms Meta (META, Financials), LinkedIn and X over unpaid value-added tax from previous years, according to a Reuters report.
Meta owes the Italian Revenue Agency around €887.6 million ($961 million), LinkedIn, a Microsoft (MSFT, Financials) affiliate, €140 million, and X, previously known as Twitter, €12.5 million. The allegations relate to value-added tax, or VAT, supposedly due between 2015 and 2022; the present evaluations concentrate on the 2015–2016 period since reporting deadlines are approaching.
According to the tax authorities, sites like Meta, X and LinkedIn should be liable for VAT as users provide personal information in return for service access. Under Italian law, this reading essentially views the supply of personal data as a taxable transaction.
This is the first time Italy has assessed taxes of this kind without previously settling, which might cause a court fight. The firms have two months to contest the rulings. They may also ask for a settlement proposal, which would give them 30 more days to respond.
Meta said it "strongly disagrees" with the idea that access to internet platforms should be charged in this manner. The firm said it had completely worked with the Italian government. While X remained silent, LinkedIn said it had "nothing to share at this time."
The conflict could affect more general European tax policy. Other member countries would be motivated to follow such readings if Italy's position stands in court as VAT laws are harmonized across the European Union.
Alphabet (GOOG, Financials; GOOGL, Financials) settled a similar Italian tax demand last year by paying €326 million, so avoiding court action.
