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Facebook reaches settlement to pay more than €100m taxes in Italy

The company will pay the country’s Revenue Agency (“Agenzia delle Entrate”) for the period 2010–2016.

Background: The Agenzia launched an investigation in June 2018, claiming Facebook had evaded taxes for €300m by routing Italian advertising sales through countries with more favourable tax rates.

What’s new? The investigation could have ended with a fine up to €100m or with a settlement on a lower figure. The Agenzia now says it has reached a settlement “beyond €100m”, which suggests the initial estimate has been reviewed during the process.

What’s next? The debate on digital taxation rumbles on internationally. There is wide disagreement across countries on the issue; however, tech companies are feeling the pressure. Facebook itself announced in December 2017 that it would change its tax structure to pay taxes where profits are made, thereby affecting how it pays taxes in 30 countries.