Meta, X, and LinkedIn appeal Italy’s VAT claim over free signups on platform – Reuters

Meta Platforms (NASDAQ:META), X, and LinkedIn (NASDAQ:MSFT) have filed an appeal against a VAT claim by Italy that could influence tax policy across the European Union, four sources with direct knowledge of the matter told Reuters on Monday.

The report said the appeal is the first time Italy failed to reach a settlement after bringing tax cases against tech companies, resulting in a full-fledged judicial tax trial.

Italian tax authorities claim free user registrations with X, LinkedIn, and Meta’s platforms should be taxable, as they imply the exchange of a membership account in return for a user’s personal data.

They are seeking $1.03B (€887.6M) from Meta, $14.6M (€12.5M) from X, and around $164M (€140M) from LinkedIn.

Sources told Reuters the case went beyond agreeing on a settlement figure and sought to establish a broader approach focused on how social networks provide access to their services.

Citing several experts, the report said the Italian approach could affect almost all companies, from airlines to supermarkets to publishers, who link access to free services on their sites to users’ acceptance of profiling cookies.

In a statement to Reuters, Meta said it “strongly disagrees with the idea that providing access to online platforms to users should be subject to VAT.”

The EU Commission’s VAT Committee is an independent advisory group. While its assessment will be non-binding, a “no” could prompt Italy to halt the case and ultimately drop the criminal investigation by Italian prosecutors, sources told Reuters.