Italy Targets Meta, LinkedIn, and X With Nearly $1B VAT Demand #ItalyFinance

Italy is demanding hundreds of millions of euros in back taxes from Meta Platforms (NASDAQ:META), LinkedIn, and X in a value-added tax (VAT) dispute that could set a precedent across the European Union, according to a Reuters report citing people familiar with the matter.

While Meta and X were already known to be under investigation, it was newly revealed that LinkedInowned by Microsoft (NASDAQ:MSFT)is also involved in what Italy is treating as a pilot case for VAT enforcement in the tech sector. According to the report, Italy is seeking 887.6 million (around $961 million) from Meta, 140 million from LinkedIn, and 12.5 million from X.

These totals cover activity dating back to 2015, though the formal notices currently focus only on the years close to expiring under Italy’s statute of limitations2015 and 2016. Italian authorities argue that user sign-ups on social media platforms should be treated as taxable transactions, claiming that access to services in exchange for personal data constitutes a form of payment.

Meta told Reuters it disagrees with that interpretation but said it is cooperating with authorities. LinkedIn declined to comment, and X has not responded. Because VAT is a harmonized EU tax, the outcome of Italy’s case could influence similar enforcement actions across the bloc and potentially challenge how social media companies monetize user data.

This article first appeared on GuruFocus.