Italy Is To Open Web Tax Of 3% On Digital Service

; posted on
December 21st, 2017

The Budget Commission of Italy’s lower house approved the “web tax” measure. Under this proposal, companies are obliged to pay a 3 percent levy on certain online transactions. This action intends to remove the benefits to tech giants granted by existing tax rules on the Union level.

WEB TAX

Before the Tallinn Digital Conference, Italy has appealed the Union to take measures to plug the tax leak by internet companies in Europe and announced to take unilateral measures in the absence of harmonised measure. The “Web Tax” included in the 2018 budget has passed the upper house Senate at the rate of 6%, but was halved by the lower house. The levy exempts e-commerce transactions but aims at transactions of “intangible digital products”. Furthermore, only companies with over 3000 online transaction on a yearly basis are subject to such levy. The exact scope of service covered is to be identified by April 2018, and the action will be introduced in 2019, which is anticipated to generate extra revenue of 190 million euros annually.

Concerns from the EU and Other Member States

Despite of understanding loopholes of current scheme, the European Commission s urges member states to wait for harmonised EU-wide solution. “Member States are understandably frustrated at the revenues they are losing. But a patchwork of national measures could create loopholes, legal clashes and distortions in the Single Market,” said a Commission spokesperson in Brussels. However, member states such as France support such measures and plans to develop their own digital taxation levy.

Sources: Reuters, Telecompaper

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