> The digital services tax (Digital Service Tax) is applied at a rate of 3% on revenues deriving from the provision of services on a digital interface for targeted advertising to users of that interface, for the provision of a multilateral digital interface that allows users to connect and interact with each other, also for the purpose of facilitating the direct supply of goods or services for the transmission of data collected from users and generated by the use of a digital interface.
> In practice, taxation applies to digital advertising on websites and social networks, access to digital platforms, fees received by the operators of such platforms, and also the transmission of data “collected” from users. Revenue is taxable if the user of the digital service is located within the territory of the State. For online advertising services, the user is considered to be located in the territory of the State if the advertisement appears on their device when it is used in the territory of the State. The location of the device in Italian territory is determined on the basis of its IP address.
> Businesses that generate revenue in Italy from the above-mentioned digital services and that, during the calendar year preceding the one in which the tax liability arises, generate a total revenue of not less than €750 million anywhere in the world, either individually or as a group, are subject to the digital tax.
It seems for me a fair tax for corporations that take advantages of data collected to provide a service that someone pays (advertisements).
nradov · 3h ago
So another extortionate shakedown of American tech companies by a European government. If only they put as much energy into encouraging growth and innovation.
melesian · 1h ago
If American companies don't want to pay taxes in Europe they can easily avoid doing so by staying home. If they prefer to earn profits in Europe they can comply with the law. As it is they do everything they can to avoid paying taxes, full stop, not just in Europe.
DrScientist · 1h ago
Just applying existing tax rules to new situations - it's the American companies that want exceptional treatment, not them being exceptionally targeted.
It's quite clear there is a transaction - with value - and a large part of these companies valuations and revenue is directly driven by the number of users.
altairprime · 2h ago
If a company takes VC investment to invest in free signups, the VCs are clearly expecting these signups to be a revenue-generating. That they aren’t treated as revenue for taxation purposes is quite the loophole when one’s core business model hinges on free signups. If U.S. companies adhered to VAT principles then instead of taxing signups, they could just tax the value added by Facebook and assign it by citizenship of the users.
How much sales tax are Facebook customers paying on their metadata purchases today? What component of that sale price or sales tax are being distributed back to the users or jurisdictions whose data was harvested? Is that a just economic outcome for everyone that isn’t Facebook?
I don’t know what the right answer is here, but I absolutely recognize the plausibility of the sort of claim being leveled here — even if tech would rather not. It’s basically just a proposed tariff on user exports from Italy, after all!
(Personally, I am looking forward to someone someday making a courtroom argument that providing free access to Facebook services without declaring a value, and without offering payment for use of one’s metadata as an alternative to unwanted services, is equivalent to valuing access those services at $0 and so back pay is owed their users-as-contractors. No one’s had the courage yet, but it’s nice to see we’re moving in the direction that might produce such outcomes.)
rgavuliak · 2h ago
Oh the ones that do everything to avoid paying taxes in Europe?
high_na_euv · 2h ago
Arent they encouraging growth by eliminating unfair competition?
verzali · 1h ago
Only fair game while the US government tries to extort everyone else.
simmerup · 2h ago
After so much Amrrica First stuff I think Europes due its own selfish streak
suddenlybananas · 2h ago
Boo hoo won't someone think of the poor American tech companies.
antiloper · 3h ago
Why don't they just make a tax on social media posts?
DrScientist · 1h ago
Because posts don't create value per se - it's the size of the captive ad market you have that determines what you can charge for ads.
> The digital services tax (Digital Service Tax) is applied at a rate of 3% on revenues deriving from the provision of services on a digital interface for targeted advertising to users of that interface, for the provision of a multilateral digital interface that allows users to connect and interact with each other, also for the purpose of facilitating the direct supply of goods or services for the transmission of data collected from users and generated by the use of a digital interface.
> In practice, taxation applies to digital advertising on websites and social networks, access to digital platforms, fees received by the operators of such platforms, and also the transmission of data “collected” from users. Revenue is taxable if the user of the digital service is located within the territory of the State. For online advertising services, the user is considered to be located in the territory of the State if the advertisement appears on their device when it is used in the territory of the State. The location of the device in Italian territory is determined on the basis of its IP address.
> Businesses that generate revenue in Italy from the above-mentioned digital services and that, during the calendar year preceding the one in which the tax liability arises, generate a total revenue of not less than €750 million anywhere in the world, either individually or as a group, are subject to the digital tax.
It seems for me a fair tax for corporations that take advantages of data collected to provide a service that someone pays (advertisements).
It's quite clear there is a transaction - with value - and a large part of these companies valuations and revenue is directly driven by the number of users.
How much sales tax are Facebook customers paying on their metadata purchases today? What component of that sale price or sales tax are being distributed back to the users or jurisdictions whose data was harvested? Is that a just economic outcome for everyone that isn’t Facebook?
I don’t know what the right answer is here, but I absolutely recognize the plausibility of the sort of claim being leveled here — even if tech would rather not. It’s basically just a proposed tariff on user exports from Italy, after all!
(Personally, I am looking forward to someone someday making a courtroom argument that providing free access to Facebook services without declaring a value, and without offering payment for use of one’s metadata as an alternative to unwanted services, is equivalent to valuing access those services at $0 and so back pay is owed their users-as-contractors. No one’s had the courage yet, but it’s nice to see we’re moving in the direction that might produce such outcomes.)