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Meta, X, and LinkedIn have appealed Italy’s case that the social media platforms should pay value-added tax.
Italian tax authorities are seeking to establish a precedent for applying value-added tax to free user registrations on social media platforms. In March, they claimed Italy was owed:
Meta, X, and LinkedIn submitted appeals to a first-instance tax court shortly after the deadline to respond to the tax assessment notice passed in mid-July, according to Reuters. In a statement, Meta said it “strongly disagrees with the idea that providing access to online platforms to users should be subject to VAT,” Reuters reported.
The case is one of many points of tension between US tech companies, which seem to be entering a time of deregulation in their home country, and European authorities.
Next, the Italian Revenue Agency is expected to consult with the European Commission’s VAT Committee, an independent advisory group. The earliest likely date for the consultation is spring 2026.
Another option would be to take the case to a full trial, which could take up to 10 years to conclude.
If it proceeds to trial, the case would mark the first full judicial tax proceeding between Italy and a tech company, following previous out-of-court settlements with US tech giants.
Because VAT is a harmonized policy across the EU, other countries could follow suit if Italy determines free accounts should be taxed, according to experts contacted by Reuters. Italian tax authorities argue that free accounts are not truly free, as social media companies receive personal data in exchange. This interpretation could potentially reshape how free services are taxed in the EU. For instance, companies offering free services on their sites — no matter what they sell — could be taxed under the same approach if they use profiling cookies to assess their users.
The EU is gradually rolling out AI guidelines to manage the risks associated with advanced models. Many of those guidelines now apply to large US companies that are foreseeing expansion under the Trump administration. In addition, the EU is devoting at least €10 billion to the Scaleup Europe Fund for high-growth tech companies.
Read our guide to the EU’s AI rulebook, including which companies have signed the voluntary agreement of compliance with the AI Act.
Megan Crouse has a decade of experience in business-to-business news and feature writing, including as first a writer and then the editor of Manufacturing.net. Her news and feature stories have appeared in Military & Aerospace Electronics, Fierce Wireless, TechRepublic, and eWeek. She copyedited cybersecurity news and features at Security Intelligence. She holds a degree in English Literature and minored in Creative Writing at Fairleigh Dickinson University.
