Italy and US Release Joint Statement on Digital Taxes
In a significant development, Italy and the United States issued a joint statement on Friday against ‘discriminatory’ taxes on digital services. This move could indicate that Rome is reconsidering a levy that has been a point of contention with Washington.
The statement came after Italian Prime Minister Meloni held consecutive meetings with former US President Donald Trump and his deputy JD Vance at the White House. Meloni received a warm welcome from Trump, which contrasted with his more reserved treatment of other European leaders.
European levies targeting major US tech companies like Alphabet’s Google, Meta’s Facebook, Apple, and Amazon have long been a source of friction for US administrations, including Trump’s.
Italy currently imposes a 3% levy on revenue from internet transactions for digital companies with sales of at least 750 million euros ($853.35 million). This tax generates less than 500 million euros in revenue for the state annually.
“We agreed that a non-discriminatory environment in terms of digital services taxation is necessary to enable investments from cutting-edge tech companies,” Rome and Washington stated following Meloni’s visit to the White House on Thursday.
The joint statement did not clarify whether Rome had committed to scrapping the tax. The issue is sensitive for Meloni, who faces pressure from her ruling coalition to increase pressure on big tech to secure funding for costly measures without straining Italy’s fragile public finances.
Economy Minister Giancarlo Giorgetti suggested that negotiations with the US on big tech taxation should be conducted bilaterally rather than through the EU. He is set to meet Treasury Secretary Scott Bessent next week at a G20 gathering.
The joint statement also welcomed American investments in AI computing and cloud services in Italy, aimed at establishing the country as a key regional data hub for the Mediterranean and North Africa. Amazon’s computing unit AWS announced last year that it would invest 1.2 billion euros in Italy over five years to expand its data center business.
The development highlights the complex balance Italy must strike between maintaining good relations with the US and addressing domestic financial needs through measures like the digital tax.
