Italy Eyes New Digital Tax

September 18, 2015 Taxation in Italy

ROME – Italy is looking to implement a new “digital tax” of as much as 25 percent on digital sale made by large online companies to consumers in the country.

In a recent televised interview the Prime Minister of Italy Matteo Renzi suggested that within two year the country would see the implementation of a tax on the sale of digital goods or service in Italy, regardless of where the seller is registered.

The Prime Minister called the proposal a “digital tax”, and specifically noted Apple and Google as targets of the new measure.

No specifics were revealed regarding how the tax will be levied, simply stating that “…we envision a digital tax that will be applied through different mechanisms, to make companies pay taxes in the place where agreements and transactions are made.”

No details were given regarding the rate of the tax to be applied, but some experts have pointed out that a recently a draft proposal was recently presented in Parliament, which would see companies with sales exceeding EUR 5 million over a period of six month being liable to pay a tax of 25 percent when selling digital goods or service in Italy.

In 2013 a study showed that at the time approximately EUR 11 billion of sales would fall under the scope of such a tax, potentially resulting of extra tax revenues of as much as EUR 3 billion.

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