Italy passes the Google Tax. In what seems to be a law that violates European Union rules the Italian Senate has passed a law that will require companies to purchase their Internet ads locally.
Forbes covered it here
From the article:
The Italian Senate has now passed the “Google Tax” and Italian lawmakers really do seem to be entirely blind to the fact that this law is illegal under European Union rules that cover trade and the establishment of companies. But what’s worse than this is that even if the law were in fact legal it wouldn’t in fact achieve what the proposers are saying that it would. Here’s Bloomberg:
Italy’s Parliament today passed a new measure on web advertising, the so-called “Google tax,” which will require Italian companies to purchase their Internet ads from locally registered companies, instead of from units based in havens such as Ireland, Luxembourg and Bermuda.
The tax has stirred controversy, with some lawyers saying it probably violates European Union laws regarding non-discrimination over commercial activity and could be subject to legal challenges.
Yes, that is, clearly and obviously, illegal under EU laws. You’re just not allowed to discriminate, in law, among people based in different EU countries. So much so that, for example, when the British government wanted to make an order for some new trains it could not favour the UK based company over a German bid. If you’re not allowed to have national preference in government acquisition then obviously you’re not allowed to tell private companies that they must follow some form of national preference.
The Star Tribune covered it here
ROME – Italy’s Parliament on Monday passed a measure on Web advertising, the so-called Google tax, which will require Italian companies to purchase their Internet ads from locally registered companies that pay taxes on them, instead of using firms based in such havens as Ireland, Luxembourg and Bermuda.
The tax has stirred controversy, with some lawyers saying it violates European Union laws regarding nondiscrimination over commercial activity.
In July, at the request of the Group of 20 nations, the Organization for Economic Cooperation and Development (OECD) proposed a blueprint to fight strategies used by such companies as Google, Apple and Yahoo to shift taxable profits into havens. Italy now becomes the first major European government to pass legislation to combat the problem of moving corporate taxable earnings into havens, which costs Europe and the United States over $100 billion a year.
Italy’s measure is “fairly obviously contrary to E.U. law,” said Sol Picciotto, an emeritus professor of law at Lancaster University in Britain. Still, he said the law “will put further pressure on the OECD to sort it out.” The OECD isn’t scheduled to complete its plan until the end of 2015.