In a move with potentially far-reaching implications for the tech industry in Europe, Italian tax authorities have extended their investigation to Elon Musk’s social network X, seeking €12.5 million in value-added tax (VAT) for the period 2016 to 2022, Reuters has reported.
According to sources with direct knowledge of the matter, the probe runs in parallel with a similar inquiry into Meta, highlighting a broader effort by Italy to scrutinize how social networks generate revenue. Italian tax officials contend that user registrations on platforms like X, Facebook, and Instagram could be viewed as taxable transactions, since they involve the exchange of a membership account in return for a user's personal data.
Although the €12.5 million claim represents a small fraction of X’s revenue—reported at $3.4 billion in 2023—the case is seen as a test of a new tax interpretation that could reshape the business model of digital service providers across the European Union, where VAT is harmonized among 27 member states.
Milan’s Guardia di Finanza (GDF) concluded its audit last April, finding that X had not paid the required VAT on its operations in Italy. In January, Italy’s Revenue Agency issued a formal list of observations regarding the 2016 tax year—a deadline that is set to expire this year. Following the audit, Milan prosecutors launched a criminal investigation into X, mirroring similar actions taken against Meta, which had completed its initial stage last December.
The tax authorities have given both X and Meta until late March or early April to respond to these observations. At that point, the companies must either agree to settle by paying the claimed amount or face a full judicial tax dispute. Should the Revenue Agency opt for the latter, the process could extend for an average of about 10 years, with potential financial liabilities increasing over time if the companies lose the case.
The probe comes amid heightened sensitivity to digital service taxes across Europe, with U.S. President Donald Trump having recently threatened tariffs on imports from countries that impose such levies on U.S. tech firms. This development adds another layer of complexity, especially as Musk maintains a strong relationship with Italian Prime Minister Giorgia Meloni and is keen to expand his Starlink communications business in the country.
In a related move, Italy extended its domestic digital services tax to small and medium-sized enterprises in November, a step taken to address U.S. objections that the tax was discriminatory.
X did not immediately respond to requests for comment on the matter. Sources noted that both X and Meta have since ceased direct interactions with Italian authorities, as the cases now touch upon a broader tax framework that could alter how digital services are taxed across the EU.
As the Revenue Agency finalizes its approach, industry observers are closely watching the case, which could set a precedent affecting the entire tech sector in Europe.
Iranian-made Yassin missiles were spotted mounted on Armenian Air Force fighter aircraft during Armenia's latest military parade on Thursday (28 May),...
The Philippines remains under a "severe threat" from China despite recent efforts by Washington and Beijing to ease tensions, Philippine Defence Secre...
Russia has recalled its ambassador to Armenia for consultations, citing Yerevan's growing rapprochement with the European Union. The move is seen as t...
At least 22 people have been killed - including children - and 35 others injured after a truck carrying Afghan returnees overturned in eastern Afghani...
U.S. Defense Secretary Pete Hegseth has urged Asian allies to increase military spending, warning of growing concern over China’s rapid military exp...
Just one week after a similar move by Australia, Greece announced that it will ban access to social media for children under the age of 15 from January 1, 2027, as governments around the world weigh tougher rules amid growing concerns over mental health, safety and screen addiction.
The European Union is preparing sweeping new regulations targeting the addictive design features of major social media platforms, including TikTok, Meta and X, amid mounting evidence linking their use to serious mental health harm among children and teenagers.
Elon Musk did not appear before French prosecutors on Monday after being formally summoned for questioning in an investigation into the alleged misuse of his social media platform X.
Tech billionaire Elon Musk said the search at his social media platform X offices in Paris on Tuesday by French authorities was a "political attack".
A group of Azerbaijani civil society organisations has called for increased scrutiny of Swiss building materials giant Holcim, citing court rulings and ongoing investigations linked to its subsidiary Lafarge's activities during the Syrian conflict.
The World Health Organization (WHO) says ongoing conflict, funding pressures and international travel restrictions are complicating efforts to contain a fast-growing Ebola outbreak in the Democratic Republic of Congo (DRC).
Thai rescuers say five people have been pulled alive from a flooded cave in remote Laos, where seven villagers became trapped after heavy rain cut off access underground.
Russia and Kazakhstan signed 15 agreements during President Vladimir Putin’s state visit to Astana on Thursday (28 May), including deals on Kazakhstan’s first nuclear power plant and expanded oil cooperation with Russia.
European companies are continuing to deepen their presence in China, with nearly seven in ten firms maintaining or expanding their supply chains despite global efforts to diversify, according to a new survey by the EU Chamber of Commerce.
BP has removed its chair, Albert Manifold, with immediate effect, citing concerns over governance and conduct. The company said its board had unanimously decided that Manifold should no longer serve as chair or director.
The dual-class share structure outlined in SpaceX’s initial public offering (IPO) filing, which gives chief executive Elon Musk outsized control, has reignited one of Wall Street’s longest-running debates over corporate governance.
Kevin Warsh will be sworn in as chair of the U.S. Federal Reserve on Friday as policymakers consider higher interest rates to tackle inflation linked to the Trump administration’s Iran policy.
A government-mediated agreement has suspended an 18-day walkout by about 48,000 Samsung union members, easing fears of damage to South Korea's economy and global chip supply.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment