Italy's Web Tax and U.S. Pressure

By Giuseppe Fonte

ROME (Reuters) – The United States has recently renewed calls for Italy to repeal its domestic web tax, increasing the risk of retaliation if Rome ignores the request.

Italy intends to maintain the tax for now, awaiting the new U.S. administration's stance, according to unnamed officials.

Donald Trump has claimed victory following Tuesday's presidential election.

Washington threatens tariffs over unilateral digital taxes in Europe, like Italy's, which applies to Meta Platforms Inc (NASDAQ:META), Google (NASDAQ:GOOGL), and Amazon (NASDAQ:AMZN), raising less than 500 million euros ($538.65 million) annually.

Despite its small revenue, the U.S. considers the scheme as unfair discrimination targeting American tech firms, as reported by sources.

The U.S. Treasury was not immediately available for comment.

Italy introduced a 3% levy in 2019 on revenue from internet transactions for digital companies with sales exceeding 750 million euros and at least 5.5 million made in Italy.

Under the government's 2025 budget, Prime Minister Giorgia Meloni plans to remove the minimum conditions for the tax, targeting to raise an additional 51.6 million euros on top of the current 400 million.

Italy's Treasury informed Washington that removing revenue floors, which increases the number of companies paying the tax, would address U.S. objections.

However, several coalition lawmakers oppose the proposed changes, arguing that the tax should continue targeting U.S. Big Tech, planning amendments to the budget bill in Parliament.

"We must trim the claws of the web giants," said Maurizio Gasparri, a senior senator with the co-ruling Forza Italia party.

The discussion includes maintaining revenue floors to protect small and medium-sized enterprises while raising the current 3% tax rate.

"An amendment like this would be the best way to get crucified by the U.S.," said the second source.

($1 = 0.9282 euros)