by InTrieste
Italian authorities are scrutinizing X, the social media platform formerly known as Twitter, over allegations that it failed to pay €12.5 million in value-added tax (VAT), according to reports by Reuters. The probe, spearheaded by the Milan prosecutor’s office, is part of a larger initiative targeting tech giants suspected of evading tax responsibilities in Italy.
The case centers around a legal question that could have significant consequences for the tech industry across Europe: should social media platforms be required to pay VAT when users create accounts? The central argument is that when individuals register for these platforms, they are essentially “paying” with their personal data in exchange for access to free services. This interpretation could potentially redefine the landscape of how digital platforms are taxed within the European Union.
Italian authorities have informed X of the alleged unpaid taxes, specifically for the fiscal year 2016. The company now faces a crucial decision: either settle the claim and close the matter or challenge the accusation in court, which could lead to a prolonged legal process.
This investigation is not an isolated incident. In December 2024, Italian prosecutors accused Meta of failing to declare more than €800 million in VAT between 2015 and 2021. In July of the same year, Amazon was also the subject of an investigation into potential tax evasion.
The resolution of these cases could set an important precedent for how digital services are taxed in Europe, potentially reshaping the operations of tech companies across the continent. For now, all eyes are on X as it determines its response to Italy’s latest legal challenge.
