Many of the world's largest tech companies, like
), save millions of dollars every year by setting up their European
online advertising sales operations in low-tax countries like
Luxembourg and Ireland. Google, for example, employs third-party
companies that are not based in Italy to serve Google network
advertisements for the Italian market. The same goes for
) and Amazon. Now, Italian politicians will debate a proposal that
would force Google, Amazon, Yahoo, and other companies that
advertise and sell online in Italy to employ advertising agencies
that pay Italian taxes.
The bill, currently tabled by the center-left Democratic Party
(PD), has the goal of raising at least 1 billion euros. Dubbed the
"Google Tax," the new levy would not directly tax major tech
companies (the Italian parliament has tried that before, without
success). Rather, the Italian state would benefit by levying taxes
on the extra income of Italian advertising agencies and Internet
service providers that Google, Apple, and others would be obliged
to work with.
The Chamber of Deputies, the lower house of Italy's Parliament, in
The bill was drafted by Francesco Boccia, Chairman of the lower
house budget committee. As he said on his
, "We shouldn't be trying to raise resources by hiking taxes on
fuel, cigarettes, or small retailers while our online purchases are
raising the profits of companies that have no interest in
developing our economy."
The "Google Tax" is the latest iteration in a series of proposals
made by Italian politicians to curtail the problem of
multinationals paying taxes elsewhere. None of the suggested bills
have yet been made into law.
The Democratic Party plans to make the "Google Tax" proposal an
amendment to the Italian government's 2014 budget, which is
currently being debated by parliament. If it passes parliament, the
bill will also have to gain the support of Silvio Berlusconi's
center-right People of Freedom party to become law.
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