Prosecutors investigate Twitter-X, tax evasion of 12.5 million

In April 2024, the Guardia di Finanza closed a tax audit of Twitter, the social network later bought by Elon Musk and renamed X, for a failure to pay VAT of 12.5 million euros for the years up to 2022. At the same time, the prosecutor Giovanni Polizzi opened an investigation for tax evasion based on a similar charge to that of the investigation into Meta.

In essence, the economic and financial police unit of the Milanese Gdf, just under a year ago - but the news was only known today - closed the tax audit with a report of findings, which refers to Twitter and the years from 2016 to 2022. The theme, like that of the Meta case, is innovative: there was an offer of "digital services to users" Italians "in exchange for the acquisition and management for commercial purposes of the personal data" of each and "of the information inherent and related interactions on the platforms", but without the payment of taxes on this "exchange between different goods". An exchange that, according to the investigations, must be subject to VAT. Now, from what has been learned, the social X, which has taken the place of Twitter, is in dialogue with the Revenue Agency regarding the tax disputes, after the conclusions of the tax office were notified to the company last month.

In the meantime, the confrontation between the Italian tax authorities and the giant founded by Mark Zuckerberg, on this type of tax assessment very different from the others that have hit the giants of the web or high tech, has not yet ended with transactions and compensations, as happened in relation to other investigations in Milan. Indeed, last December, the Public Prosecutor's Office, led by Marcello Viola, with prosecutors Giovanna Cavalleri, Giovanni Polizzi and Cristian Barilli, closed the investigation into Meta against the two legal representatives of the Irish offshoot company. An investigation, for VAT evasion between 2015 and 2021 for a total of over 877 million euros, which for the first time addressed the issue of the financial and fiscal weight of user data on social media, with profiles on Facebook and Instagram. Same model as the one, which is still open, on Twitter International Uk for "false tax declaration" and which sees two administrators under investigation, an Irishman and an Indian, who succeeded each other, between 2016 and 2022.

These are two "pilot" investigations, which in theory could have an impact on the two social media giants in other countries as well, because - according to the reasoning of the Guardia di Finanza, the Public Prosecutor's Office and the Italian Tax Office - the exchange between the offer of use of the platform for users and the personal data provided by the latter must be subject to taxation. As the prosecutor Marcello Viola underlined after the closure of the investigation into Meta, "the non-free nature of the services offered", the central point of the investigation, in past years has "already been affirmed by the Competition and Market Authority, by the Lazio Regional Administrative Court, as well as by authoritative doctrine, and has been confirmed by the inspection activities of the Guardia di Finanza, in the documents of the Revenue Agency and finally in the results of the criminal investigation".