Italy Seeks Tax Payments from Meta, X, LinkedIn in Pivotal Case

Four people with direct knowledge of the situation said on Wednesday that Italy has made tax claims against the U.S. tech giants Meta (META.O), opened new tabs, X, and LinkedIn in an unprecedented VAT claim that could have an impact throughout the European Union. Microsoft’s (MSFT.O) new tab LinkedIn unit was also involved in Italy’s pilot VAT case for the European tech sector, despite reports that Elon Musk’s social network X and Facebook and Instagram parent company Meta were being investigated for suspected tax fraud.

Massive Tax Demands Against Major Tech Platforms

Italy is demanding 887.6 million euros ($961 million) from Meta, 12.5 million euros from X, and around 140 million euros from LinkedIn. The above amounts apply to the full time under inquiry, ranging from 2015-2016 to 2021-2022, depending on the case, although the assessment of tax notification now served extends only to the years during which the claims are expected to expire, namely 2015 and 2016.

Taxable User Enrollment: A New Precedent in Europe?

Given the current trade tensions between the EU and President Donald Trump’s administration, the subject is likely to be especially delicate. Italian tax regulators claim that user enrollment on the X, LinkedIn, and Meta platforms should be considered a taxable activity because they include the provision of a membership account as compensation for a user’s personal information.

Wider Implications Beyond Social Media

According to numerous experts surveyed by Reuters, the Italian approach might affect practically all organizations, from airlines to markets to marketers, who require users to embrace profiling cookies in order to access complimentary features on their websites. 

The additional option is that the Income Agency, whose report goes administratively to the Economy Ministry, withdraws its claim. According to the information, this might happen at any time throughout the proceedings, for either technical explanations, such as the potential difficulties of implementing this technique, or political reasons.