4 ms·

It seems that the whole stuff is "debatable" (i.e. it is not a "plain" case of not having paid VAT), the input is seemingly coming from an EU organism, the Eppo

by jaclaz 4y ago

It seems that the whole stuff is "debatable" (i.e. it is not a "plain" case of not having paid VAT), the input is seemingly coming from an EU organism, the Eppo: https://www.eppo.europa.eu/it https://www.eppo.europa.eu/it The theory (simplified) is the following (from what I can understand, most related news miss details): 1) each user when signing on the platform receives access in exchange for providing something (personal data) which Facebook/Instagram/Meta can later monetize (i.e. these data represent some value) 2) this is a form of barter and as such it is subject to VAT What has been done is (seemingly) that of calculating (somehow) this value in Euro and consider it as a tax base for applying VAT.

gpderetta 4y ago
Isn't this "barter" something that Meta put in its end user contract to try to circumvent GDPR and now it is backfiring? Or am I off?
- jaclaz 4y ago
  No, I don't think that this has anything to do with GDPR or data protection, this is merely an interpretation of the Tax code. It is well established that a commercial transaction made through a barter bears no difference against the same transaction made through exchange of money. The barter may be through exchange of goods or services. There is a by now historical sentence here in Italy about the organizers of a contest and a local newspaper[0]. Basically the newspaper published about the contest (not as a news article but rather as an ad, including the rules, forms and what not) and the contest organizers had on all their printed material (forms to sign in, posters, etc.) a note like "in cooperation with newspaper name". The Tax office considered this "exchange" as if it was two operations, one in which the newspaper sold publicity, and one in which they bought publicity on the contest material and it went through all the various courts until the Cassazione confirmed this approach. That was a case between two entities subject to VAT, in the case of citizens (not subject to VAT) and an entity subject to VAT (Meta in this case) the part subject to VAT should (in theory) emit an "auto-invoice" and declare the VAT on the value. (or at least this is how I understand the matter, probably there will be more details in the news in the next few days/weeks). [0] (in Italian): https://sentenze.laleggepertutti.it/sentenza/cassazione-civile-n-7947-del-21-03-2019 https://sentenze.laleggepertutti.it/sentenza/cassazione-civi...
jsnell 4y ago
Wow, that's one wild legal theory, especially given Italy is (IIUC) already taxing the ads that actually produce the revenue via the Digital Services Tax. Why stop at user registration? The service can collect user data for anonymous users just the same. And why stop at collection of user data being the quid pro quo in the exchange? If a site is letting people use it for free, the site must be getting something of value from that user no matter how undefinable, and that value can be taxed.
- wizzwizz4 4y ago
  > Wow, that's one wild legal theory, In some jurisdictions, contracts require a quid pro quo in order to be valid. I don't know whether Italy is one of them – but don't big tech people keep talking about how their services are a fair exchange for your data?[0] Your "anonymous users" point seems reasonable. Your second does not: blatantly assuming that all free services are extracting a profit is foolish, and not something I've seen officials actually do. [0]: https://www.theregister.com/2019/02/21/zuckerberg_privacy_interview/ https://www.theregister.com/2019/02/21/zuckerberg_privacy_in...
  - zoklet-enjoyer 4y ago
    It's the internet. I would make sure I didn't have a physical presence in the country and just ignore it if I was in Meta's position.
mellavora 4y ago
This is a fascinating legal theory. We've know for years that "you are paying for it with your data"; if governments can collect VAT on this transaction, it changes the economics of so many businesses.
mr_toad 4y ago
People have been providing free services in exchange for advertising revenue since the invention of the newspaper. And they’ve only just come up with this argument now? Something smells.

by jaclaz 4y ago

gpderetta 4y ago

Isn't this "barter" something that Meta put in its end user contract to try to circumvent GDPR and now it is backfiring? Or am I off?

jaclaz 4y ago
No, I don't think that this has anything to do with GDPR or data protection, this is merely an interpretation of the Tax code. It is well established that a commercial transaction made through a barter bears no difference against the same transaction made through exchange of money. The barter may be through exchange of goods or services. There is a by now historical sentence here in Italy about the organizers of a contest and a local newspaper[0]. Basically the newspaper published about the contest (not as a news article but rather as an ad, including the rules, forms and what not) and the contest organizers had on all their printed material (forms to sign in, posters, etc.) a note like "in cooperation with newspaper name". The Tax office considered this "exchange" as if it was two operations, one in which the newspaper sold publicity, and one in which they bought publicity on the contest material and it went through all the various courts until the Cassazione confirmed this approach. That was a case between two entities subject to VAT, in the case of citizens (not subject to VAT) and an entity subject to VAT (Meta in this case) the part subject to VAT should (in theory) emit an "auto-invoice" and declare the VAT on the value. (or at least this is how I understand the matter, probably there will be more details in the news in the next few days/weeks). [0] (in Italian): https://sentenze.laleggepertutti.it/sentenza/cassazione-civile-n-7947-del-21-03-2019 https://sentenze.laleggepertutti.it/sentenza/cassazione-civi...

jsnell 4y ago

Wow, that's one wild legal theory, especially given Italy is (IIUC) already taxing the ads that actually produce the revenue via the Digital Services Tax. Why stop at user registration? The service can collect user data for anonymous users just the same. And why stop at collection of user data being the quid pro quo in the exchange? If a site is letting people use it for free, the site must be getting something of value from that user no matter how undefinable, and that value can be taxed.

wizzwizz4 4y ago
> Wow, that's one wild legal theory, In some jurisdictions, contracts require a quid pro quo in order to be valid. I don't know whether Italy is one of them – but don't big tech people keep talking about how their services are a fair exchange for your data?[0] Your "anonymous users" point seems reasonable. Your second does not: blatantly assuming that all free services are extracting a profit is foolish, and not something I've seen officials actually do. [0]: https://www.theregister.com/2019/02/21/zuckerberg_privacy_interview/ https://www.theregister.com/2019/02/21/zuckerberg_privacy_in...
- zoklet-enjoyer 4y ago
  It's the internet. I would make sure I didn't have a physical presence in the country and just ignore it if I was in Meta's position.

mellavora 4y ago

This is a fascinating legal theory. We've know for years that "you are paying for it with your data"; if governments can collect VAT on this transaction, it changes the economics of so many businesses.

mr_toad 4y ago

People have been providing free services in exchange for advertising revenue since the invention of the newspaper. And they’ve only just come up with this argument now? Something smells.