India scraps 6 percent digital advertising tax on IT companies
Italy and the United States have issued a joint statement against the taxes imposed by various countries on digital services provided by information technology companies. Not long ago, US President Donald Trump announced that he would take strict action against the country that imposes Digital Services Tax (DST) on technology companies in his country.
Italian Prime Minister Giorgia Meloni made a statement after meeting with Trump and his Vice President JD Vance stating that DST is a "biased" provision, according to Reuters. Such a tax, especially aimed at large American technology companies such as Google, Facebook, Apple, Amazon, has been a matter of concern for the American administration.
Trump ordered his trade representative two months ago to start an investigation and propose retaliatory tariffs on countries like France, Britain, and Canada that implement DST. Nepal has also been imposing DST of 2 percent of annual turnover on technology companies. After Trump started talking about this issue, India canceled the digital advertisement tax in the last week of March. Since 2016, India has been imposing 6 percent tax on foreign companies like Alphabet (Google), Meta and Amazon for providing digital advertising services in India.
In Italy, companies that provide digital services and have an annual turnover of more than 750 million euros have to pay a 3 percent tax on their income. According to Reuters, Italy will collect an average of 500 million euros in revenue from such a tax. Prime Minister Meloni's statement issued after his visit to Washington said, "We have agreed that taxes on digital services should not be biased so that modern technology companies can invest in Italy." Although it is mentioned in the
statement that Trump will make an official visit to Italy soon, it is not clear whether the DSAT will be removed/not removed. "Even though the revenue collected from this is very low compared to Italy's total annual budget expenditure of 800 billion euros, this matter is politically sensitive," according to Reuters, "on the one hand, there is American pressure on Meloni, and on the other hand, the parties in his power coalition are insisting on bringing the large technology companies into the scope of additional taxes to raise the necessary resources to operate an expensive social plan."
Italy's finance minister Giancarlo Giorgetti has said that there should be direct bilateral talks between the US and Italy, not through the European Union, on the issue of taxes on digital services provided by technology companies. He has also informed that he is preparing to meet with American Finance Minister Scott Besant at the G-20 conference next week. In a
ing statement, Italy welcomes US investment in artificial intelligence, computing and cloud services. Italy has expressed confidence that it will help Italy in its efforts to create a regional data center for the Mediterranean and North Africa. Amazon's cloud service unit "WS" announced last year that it would invest 1.2 billion euros in Italy within five years. Under that, the goal is to expand the data center in Italy .
