After US objections

Italy wants to extend digital tax to SMEs

So far, only tech heavyweights have been asked to pay.(Bild: AP/APA/dpa/Stefan Jaitner)

Italy wants to extend its tax on digital services to small and medium-sized enterprises in order to overcome objections from the USA. This was stated by Finance Minister Giancarlo Giorgetti in a question and answer session before parliament in Rome.

The USA considers Italy's levy to be discriminatory because it is mainly aimed at US tech giants such as Google and Facebook parent company Meta and has therefore threatened to impose tariffs on several occasions. 

In 2019, Italy introduced a three percent levy on revenue from internet business for digital companies with an annual turnover of at least 750 million euros if at least 5.5 million euros of this is generated on the Italian market. Austria also introduced a similar digital tax on online advertising in 2020.

Avoiding conflicts with Washington
The Ministry of Finance in Rome is now planning to abolish these minimum conditions as part of the 2025 budget. Giorgetti said that increasing the number of companies that have to pay the tax is aimed at avoiding conflicts with Washington. "This removes the element of 'discrimination' that underlies the US complaint. I think other countries will do the same," explained Giorgetti.

In Austria, the digital tax brought in around 100 million euros in 2023. It is aimed at online advertising, which is not affected by the advertising tax. Companies that generate a turnover of at least 25 million euros from online advertising services in Austria and have a global turnover of at least 750 million euros are affected. The tax rate is five percent.