Well, you heard it first here folks. The proposed Google Tax in Italy appears to be illegal under European Union law:
The European Commission warned on Thursday that Italy’s proposed legislation to raise revenue from online companies including Google Inc and Amazon Inc was likely to break European Union rules.
“We would have serious doubts about the amendment as it now stands, as it appears to go against the fundamental freedoms and principles of non-discrimination set out in the Treaties,” said Emer Traynor, spokeswoman for Algirdas Semeta, the EU’s taxation commissioner.
It’s not as if this is new information either. I pointed this out on this site back on November 3 this year. I even pointed to the Italian Chamber of Deputies own research service insisting that it was illegal.
The more general lesson of this is that politicians, at least inside the European Union, are no longer the masters of their own destiny. Everyone is now signed up to a system where sovereignty over much public policy simply now no longer resides with national politicians. You can think that’s a bad idea, as I do, or you can think that a good one. That’s obviously a matter for debate. But it really does behove politicians to understand the system they now operate in. Subjects like VAT, trade rules, human rights, most matters environmental, these are simply not part of national politics any more. Previous generations of politicians signed these away to the EU and they are all dealt with in Brussels now.
It would appear that Francesco Boccia is going to have to go back to the drawing board on this one. It just isn’t legal to insist that people only buy advertising through a company with an Italian VAT registration. It’s not sensible either but then that’s not stopped a politician yet.
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