News that the Italian authorities are assessing Meta for VAT on the supply of Facebook has thrown into the spotlight the issue of whether VAT is due on the supply of ‘free’ digital services. Valentina Sloane KC (Monckton Chambers) examines the issues at stake.
When consumers use a ‘free’ social media platform are they providing non-monetary consideration in the form of their data? Is VAT due on the supply of the platform and if so what is the taxable amount?
The issue of whether free digital services are taxable transactions has assumed prominence in light of media headlines that Italian tax authorities are pursuing Facebook-owner Meta for alleged unpaid VAT of €870m. The basis for the alleged liability is that ‘free’ membership on Meta platforms comes in return for access to user data and should be classified as an exchange of services therefore subject to VAT....
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News that the Italian authorities are assessing Meta for VAT on the supply of Facebook has thrown into the spotlight the issue of whether VAT is due on the supply of ‘free’ digital services. Valentina Sloane KC (Monckton Chambers) examines the issues at stake.
When consumers use a ‘free’ social media platform are they providing non-monetary consideration in the form of their data? Is VAT due on the supply of the platform and if so what is the taxable amount?
The issue of whether free digital services are taxable transactions has assumed prominence in light of media headlines that Italian tax authorities are pursuing Facebook-owner Meta for alleged unpaid VAT of €870m. The basis for the alleged liability is that ‘free’ membership on Meta platforms comes in return for access to user data and should be classified as an exchange of services therefore subject to VAT....
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
