Letta Says Italy Will Coordinate With EU Over ‘Google Tax’

Italian Prime Minister Enrico Letta said he will coordinate with the European Union over his party’s plan to tax advertising sales by Internet companies like Google Inc. (GOOG)

The levy, set for a final vote in the Italian parliament on Dec. 23, is under scrutiny as the EU seeks to ensure taxation of the digital economy is compatible with the single market’s rules. EU leaders today asked the European Commission to evaluate the matter and report back “as soon as possible.”

The Italian plan “needs coordination with the essential European rules,” Letta said in Brussels after the government chiefs’ summit. The EU review will allow Italy “to tackle an issue that definitely must be tackled, that is the relationship between our primary rule that provoked all this debate and the EU framework.”

The Italian plan would require companies that advertise on the Internet to buy space and services only from firms that are registered for tax purposes in Italy. The proposal was added by lawmakers in Letta’s party to the 2014 budget bill, which is before Italy’s lower house today.

The bill, if it passes today, must be approved by the Senate before becoming law. The plan is known in Italy as the web tax or the Google tax.

To contact the reporter on this story: Andrew Frye in Brussels at afrye@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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