Italy Risks Provoking Trump by Matching France’s Facebook Tax
Italy Risks Provoking Trump by Matching France's Facebook Tax
(Bloomberg) -- Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Pocket Cast or iTunes.
Italy will start taxing digital companies like Facebook Inc. and Alphabet Inc., following France with an initiative that has raised the prospect of U.S. sanctions.
The legal framework was introduced in the 2019 budget law but the measure was never enacted. Finance Minister Roberto Gualtieri said Thursday that it will now enter into force on January 1, 2020.
France launched its own digital tax in July, triggering a so-called 301 investigation by the U.S., the same tool that President Donald Trump deployed to impose tariffs on Chinese goods for alleged theft of intellectual property. The investigation is still ongoing.
Italy has been trying to curry favor with the U.S. president as his relationship with the broader European Union falters. Prime Minister Giuseppe Conte’s government claimed it won more lenient treatment when Trump unleashed his latest raft of punitive tariffs on EU goods.
The U.S. is monitoring the Italian government’s move, according to an official who asked not to be named discussing a confidential issue.
Italy’s previous administration had intended to levy a 3% tax on tech companies with a global revenue of at least 750 million euros ($825 million) and sales of over 5.5 million euros in Italy. It expected to raise 150 million euros in 2019 and 600 million euros in 2020 and 2021.
“We do not want a digital tax that is Italian only, we want it to fit within a measure that is defined internationally,” Gualtieri said Thursday in Luxembourg. “We will enact our tax in any case, but we are an active part of the negotiations that we will continue in Washington at the Group of 20.”
Other European nations, including the U.K. and Germany, are mulling similar taxes. But after an initiative to impose a broad, EU-wide digital tax failed this year, the focus is now on talks at the Organization for Economic Cooperation and Development aimed at tackling the issue globally.
The OECD published its own proposals this week and is aiming to win support from Group of 20 nations by the end of next year.
--With assistance from Viktoria Dendrinou, William Horobin and John Follain.
To contact the reporter on this story: Alessandro Speciale in Rome at aspeciale@bloomberg.net
To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Ben Sills, Raymond Colitt
©2019 Bloomberg L.P.