* Ruling party's bill would hit online multinationals
* Aims to force more business through Italian firms
* Critics say law unworkable, not thought through
By Gavin Jones
ROME, Nov 4 Italy's largest ruling party has
proposed legislation to raise government revenues by making it
more expensive for multinational online companies like Google,
Amazon and Yahoo to do business there.
A bill tabled by the centre-left Democratic Party (PD) aims
to raise at least 1 billion euros through a law, dubbed the
"Google Tax", obliging companies that advertise and sell online
in Italy to do so only through agencies with a tax presence in
While its proponents see the measure as a popular way to
raise revenues on profitable foreign companies, detractors say
it is based on wishful thinking rather than a sound knowledge of
how Internet commerce and advertising work.
The proposal would not tax the multinationals directly but
would force them to use Italian companies to place their
advertisements, rather than doing so through third parties based
in low-tax countries like Luxembourg, Ireland or outside the
The state would benefit from tax levied on the extra income
of Italian advertising agencies and Internet service providers.
The man who drafted the bill, lower house budget committee
Chairman Francesco Boccia, said it was unacceptable that online
companies paid taxes abroad on revenue from sales in Italy,
taking advantage of lower fiscal levies elsewhere.
"We shouldn't be trying to raise resources by hiking taxes
on fuel, cigarettes or small retailers while our online
purchases are raising the profits of companies that have no
interest in developing our economy," Boccia said on his website.
The Google Tax is the latest of several proposals by Italian
politicians targeting online multinationals, including one to
force them to pay their taxes in Italy, but none have been
translated into law.
Critics say the latest idea has also not been thought
through and would be difficult to apply.
"This is just a Freudian expression of a subconscious desire
(to tax online multinationals) rather than a real proposal with
a solid basis," said Internet expert Giacomo Dotta on
Webnews.it, an Italian online magazine.
No comment on the proposal was immediately available from
Google Italia, Yahoo Italia or Amazon Italia.
The PD plans to turn the proposal into an amendment to the
government's 2014 budget currently before parliament, Boccia
said on his website, a move publicly backed on Monday by PD
Leader Guglielmo Epifani.
"I am in favour of the so-called Google Tax," Epifani told
La Stampa daily, when asked how the PD hoped to fund around 2.5
billion euros it says must be found next year to help pensioners
The measure will only become law if it also wins the support
of Silvio Berlusconi's centre-right People of Freedom party
(PDL), the other main party in Prime Minister Enrico Letta's