What Happened: On Friday, Italy and the U.S. issued a joint statement condemning “discriminatory” digital taxes, reported Reuters.
In a statement following Italian Prime Minister Giorgia Meloni's meeting with President Joe Biden, the two nations agreed that a non-discriminatory environment for digital service taxation was essential for fostering investment from innovative tech companies.
"We agreed that a non-discriminatory environment in terms of digital services taxation is necessary to enable investments from cutting-edge tech companies," said the statement released after Prime Minister Giorgia Meloni visited the White House on Thursday.
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European taxes targeting major U.S. tech firms like Alphabet’s Google, Meta’s Facebook, Apple, and Amazon have long been a point of contention for U.S. administrations, including during Donald Trump’s presidency.
Italy currently imposes a 3% tax on revenue from online transactions for digital companies with global sales of at least 750 million euros ($853.35 million), though the measure generates less than 500 million euros annually for the Italian government.
Although the tax brings in a relatively modest amount of revenue in a country with total budget spending exceeding 800 billion euros, Italy's digital levy remains a politically sensitive issue for Meloni.
While the joint statement did not specify whether Italy would completely scrap its 3% tax on digital revenue, it marked a significant shift in Italy's approach. It also said that Trump will be visiting Italy in the future, the report noted.
Why It’s Important: The joint statement between Italy and the U.S. comes amid a backdrop of ongoing trade tensions between the EU and the U.S.
Kevin O’Leary, known for his role on "Shark Tank," previously argued that the EU's "zero-for-zero" tariff proposal on industrial goods presented a major chance for President Trump to ease trade tensions.
Meanwhile, the EU and China agreed to explore setting minimum prices for Chinese-made electric vehicles as an alternative to the tariffs introduced last year.
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