Italy and the United States issued a joint statement on Friday opposing what they termed “discriminatory” taxes on digital services, signaling that Italy may be reconsidering a levy that has long been a point of contention with Washington.
The announcement came as Italian Prime Minister Giorgia Meloni held a series of back-to-back meetings with former U.S. President Donald Trump and his deputy, JD Vance, receiving a notably warm reception from President Joe Biden—a stark contrast to the cooler interactions between the U.S. and some other European leaders.
The issue centers around European taxes targeting dominant U.S. tech giants like Google (Alphabet), Facebook (Meta), Apple, and Amazon, which have long caused friction between the U.S. and European governments, including during the Trump administration. Italy, in particular, imposes a 3% levy on revenue from internet transactions for digital companies generating at least 750 million euros ($853 million) annually, bringing in less than 500 million euros in tax revenue each year.
Following Meloni’s visit to the White House, both Rome and Washington expressed the need for a “non-discriminatory” environment regarding digital services taxation to attract investments from cutting-edge technology companies. However, the joint statement did not clarify whether Italy intends to abolish the tax.
Despite the relatively modest revenue the tax generates in a country with a national budget exceeding 800 billion euros, the levy remains a sensitive topic for Meloni. While facing U.S. pressure, factions within her ruling coalition are urging her to maintain or even increase pressure on big tech companies to help secure much-needed funding for expensive initiatives without further straining Italy’s fragile public finances.
Italy’s Economy Minister Giancarlo Giorgetti emphasized that negotiations on taxing big tech should take place directly between the U.S. and Italy, rather than through the EU European Union. He also confirmed he would meet U.S. Treasury Secretary Scott Bessent next week at the G20 summit.
The statement also highlighted U.S. investments in Italy, particularly in AI computing and cloud services, with a focus on turning Italy into a regional data hub for the Mediterranean and North Africa. Amazon’s AWS, for instance, announced a 1.2 billion-euro investment in expanding its data center business in Italy over the next five years.
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