Social network X targeted by investigation in Italy for tax evasion

The Milan prosecutor's office has opened an investigation into tax evasion targeting the social network Twitter, renamed X by Elon Musk , suspected by the financial police of owing 12.5 million euros in VAT in Italy, we learned from a judicial source on Wednesday, February 26.

The Milan Financial Police closed in April 2024 a tax investigation against the company "Twitter UK" for the crime of "failure to declare" its income earned between 2016 and 2022 in Italy, in order to evade VAT, according to the source. The investigation focused on income generated before the arrival at the helm of the social network of American billionaire Elon Musk, who acquired it in October 2022 for 44 billion dollars, the source said.

While registration on X, Facebook or Instagram is theoretically free, users are required to agree to share personal data and information in order to open an account, and their interactions on social networks are rich in lessons for the platforms. Internet users thus engage in a relationship in which each party has obligations towards the other, the Milan prosecutor's office argued in December.

Another American digital giant, Meta, was targeted last year by the Italian financial police in a similar investigation, which cited the same motives as in the case involving X. According to the Milan prosecutor's office, Meta owes more than €887 million in VAT on its revenues generated between 2015 and 2021, something that the parent company of Facebook and Instagram categorically denies. Meta allegedly failed to declare revenues of €3.99 billion for the period 2015-2021, corresponding to VAT of €887.6 million, the prosecutor's office estimates.

Google, for its part, paid 326 million euros to close a dispute with the Italian tax authorities, the Milan prosecutor's office announced on February 19. The Italian justice system suspected Google of not having paid the taxes due for the period 2015-2019. According to the prosecutor's office, Google Ireland Limited, a company incorporated under Irish law, had "failed to submit the annual declaration of income earned in Italy" in particular through "the sale of advertising space" .