Italy is conducting an initial assessment of Facebook parent Meta in a tax case that could result in a bill of approximately 870 million euros ($925 million). This case is significant for the tech sector and is expected to be concluded by the end of the year.
The case could have significant implications for the industry as it focuses on how Meta grants access to services like Facebook and Instagram, according to Reuters.
The case originated from an Italian audit that stated Meta user registrations could be considered a taxable transaction because they involved the exchange of a membership account for the user’s personal data.
The audit conducted by Italy’s Guardia di Finanza (GdF) police, passed on by the European Public Prosecutor’s Office (EPPO), led to the opening of a criminal investigation by Milan magistrates earlier this year.
This has initiated a dialogue between Meta and the Italian tax agency, known as the assessment phase, which will conclude this year either with the company agreeing to pay or with the initiation of tax litigation.
The assessment includes high-ranking Italian tax officials due to the sensitive nature of the issue. Its outcome will influence the direction of the criminal investigation.
Meta acknowledged its commitment to fulfilling its tax obligations, ensuring payment of all required taxes in the countries it operates, and expressing willingness to cooperate fully with the Italian authorities.
“We strongly disagree with the idea that providing access to online platforms to users should be charged with VAT,” a Meta spokesperson said in an emailed statement to Reuters.