Italy is all set to introduce a brand new tax on digital companies that will include American companies as well. The tax will be a part of Italy's 2020 draft budget that will be revealed on October 16. According to reports, the latest development could face some sort of criticism from their American counterparts as it will require companies such as Facebook, Google, and Amazon to pay a total of 3% on their internet transactions.
The US has continuously stated that the latest "digital" tax against American companies is completely unfair. In addition to this, a US representative stated that president Trump was ready to challenge the tax as he will be meeting Italy's President, Sergio Mattarella, in the capital city of Washington.
The Italian tax is expected to generate around 600 million euros a year, as Rome attempts to find different incomes that will allow it to keep away from a set increase in the sales tax. Italy and other members of the European Union have complained about the way digital companies benefit by accumulating a large amount of revenue in their countries. However, they pay only a couple of million euros in taxes every year. The European Union has so far neglected to agree on the best way to charge a tax to these companies.
Meanwhile, a court in the Italian city of Milan has stated that Netflix needs to pay its taxes in Italy regardless of the fact that it does have an office in the country. In addition to this, it was stated that Netflix extends its service to about 14 million people and that led lawyers fighting the case against the digital platform that the services used by the company are equivalent to having a physical office in Italy.
Also, France and the United States arrived at an arrangement in the month of August to end a disagreement over a French tax on digital companies, with France reimbursing the companies in reference to the French digital tax.
(With inputs from agencies)