Tech Giants Meta, X, and LinkedIn Clash with Italy Over €1B+ VAT Demand – Who Blinks First?

Italy’s tax authority just dropped a billion-euro bomb on Silicon Valley—and the tech titans aren’t paying quietly.

The showdown:
Rome claims Meta, X, and LinkedIn owe over €1 billion in unpaid VAT. The companies are pushing back hard, setting up a legal battle that could redefine tax enforcement for digital empires.

Why it matters:
This isn’t just about Italy. It’s a test case for how governments worldwide will claw back revenue from borderless tech giants. Spoiler: more countries are taking notes.

The cynical twist:
Meanwhile, traditional businesses still file paper receipts. Priorities, right?

Meta, X, and LinkedIn challenge Italy

Previous tax disputes between Italy and tech companies have ended in negotiated settlements, but this is the first time such a case has escalated to a full judicial tax trial. The companies filed their appeals in a first-instance tax court after mid-July, following the March issuance of tax notices and the expiration of the response deadline.

Businesses that provide free digital services that rely on user consent for data profiling, such as airlines, supermarkets, and media companies, could also fall under the expanded VAT scope if Italy’s approach is upheld.

The VAT issue is particularly sensitive in the context of EU-U.S. trade relations, which have seen renewed tensions under the administration of U.S. President Donald Trump.

In a statement to Reuters, Meta said it had “cooperated fully with the authorities on our obligations under EU and local law” but “strongly disagrees with the idea that providing access to online platforms to users should be subject to VAT.”

LinkedIn said it had “nothing to share at this time,” and X did not respond to requests for comment.

Italy is considering consulting the EU Commission

While the court case formally proceeds, Italy is considering seeking an advisory opinion from the European Commission. This could influence whether or not the trial continues through Italy’s lengthy three-tiered judicial process, which often takes up to 10 years.

According to sources familiar with the matter, the Italian Economy Ministry intends to submit questions to the EU Commission’s VAT Committee by early November. This committee, an independent advisory group that meets twice a year, will provide a non-binding opinion, likely by spring 2026.

Although not legally enforceable, a negative opinion from the committee could lead Italy to drop the case and possibly end the related criminal investigation by Italian prosecutors. Both the Revenue Agency and Economy Ministry declined to comment on the matter, and no official confirmation has been made regarding the timeline for submitting questions to the EU Commission.

In recent times, tech companies and the EU have clashed repeatedly. On July 11, Meta stated that it WOULD not alter its “pay-or-consent” model, despite the threat of EU fines.

Meanwhile, the European Commission has reportedly paused a separate investigation into X for violating digital transparency rules, as it seeks to avoid disrupting the ongoing trade talks with the U.S.

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