Meta, here’s how the Milan prosecutor’s office challenges Brussels on VAT not paid by Facebook
Innovative thesis (already rejected years ago by the EU Commission) of the Milanese prosecutor's office: if Meta makes money with data, then Facebook registrations are not free and VAT must be paid (for almost 1 billion). Facts, numbers and insights
Mark Zuckerberg on trial? The Milan prosecutor has opened a file on Meta Platforms Inc, the Californian group that includes the main social networks on the Web as well as of course the instant messaging program that practically the entire Western world has installed on their smartphones, contesting the non-payment of VAT. But let's go in order.
THE ITALIAN THESIS
To try to trouble the Menlo Park group, grappling with the challenges launched, again on the shareholder front, by the subscriptions announced by Elon Musk , an alleged omitted payment of VAT for around 870 million euros. Trifles for a company capable of billing (over the years we have understood how) about 86 billion dollars, while a huge amount for the Italian state.
In short, if the interpretations and estimates of the magistrates were correct, what is contested against Meta Platforms Ireland, the group's Irish headquarters, will have an echo not only in the media, but also in the economy. In detail, the Economic and Financial Police Unit of the Milan Guardia di Finanza accuses the failure to submit the value added tax return by the social media giant from 2015 to 2021.
REGISTRATION WOULD BE “NOT FREE”
Now, earlier we sibilantly said that over the years we have discovered the business model of Facebook. Anyone who followed Zuckerberg 's depositions to Congress at the time of Cambridge Analytica will remember that it was Mark himself who explained them to US politicians. Here, in a certain sense all this is intertwined with the Italian investigation, as the unpaid VAT would concern the registration of users on the various social platforms.
META PAY VAT ON THE DATA
It will be objected that the registrations, at the moment, are totally free: it is not entirely true and precisely here we return to the deposition of number 1 of Meta. In reality, the user more or less consciously (this does not detect and above all does not interest the Fiamme Gialle) pays the price with his personal data which, it should be known to everyone by now, is used in the first place by the social network, which has one of the largest global databases but also transferred to third parties for increasingly accurate advertising operations, created by AI algorithms on the basis of searches, shares, likes, comments left on social networks.
According to what has been disclosed, the investigation, originally an administrative investigation, had been initiated by the prosecutors of the European public prosecution office (Eppo) Giordano Baggio, Sergio Spadaro and by the European deputy prosecutor Danilo Ceccarelli who, later, stripped of the competence of the case, now assigned to Giovanni Polizzi, prosecutor who is part of the deputy prosecutors of the second department led, for a few weeks, by the adjunct Tiziana Siciliano.
The work of the military was not easy, as they first had to quantify the Italian users registered on the various social networks and media, disaggregating the Italian data from the European ones, and then quantify the creation of value brought to the company's coffers for each. Of course, in those data there can be anything: double profiles, fakes and bots that the Menlo Park company will never have an interest in bringing to light as in this case, given that those users do not bring money to the company's coffers (however, admitting it would mean giving reason to the Italian thesis).
THE REPLIC OF THE US COLOSSUS
And in fact, as reported by Il Sole 24 Ore , Meta, which is assisted by the lawyer Nicola Crispino, an expert in tax law, let it be known through a spokesperson that he takes "our tax obligations seriously and we pay all the taxes required in each of the countries in which we operate. We strongly disagree with the idea that users' access to online platforms should be subject to VAT payment. As always, we are willing to fully cooperate with the authorities with respect to our obligations under European and national legislation."
THE PREVIOUS OF 2018
On this point – notes the Confindustria newspaper – already in 2018 the German authorities asked the opinion of the VAT Committee at the EU Commission to find out whether the supply of electronic services without payment by IT service providers in exchange for the right to use the data of its customers and the concession by users to the IT service provider to use such data constituted a taxable transaction for VAT purposes: the answer was that the supply of data is not a taxable supply of services.
WHAT IF EVERYONE ASKED HALF THE VAT?
What is certain is that if the thesis of the Milan Public Prosecutor's Office were accepted this time, also in the light of the statements made by Facebook's number 1 on his company's business model to the US Congress, all the other Public Prosecutors' Offices of the Twenty-seven would move forward, claiming your own slice of the pie…
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/meta-ecco-come-la-procura-di-milano-sfida-bruxelles-sulliva-non-pagata-da-facebook/ on Thu, 23 Feb 2023 10:56:23 +0000.