Meta, X, and LinkedIn challenge Italy's tax demand on free access to social media

Meta, Elon Musk’s X (formerly Twitter), and Microsoft-owned LinkedIn are challenging a significant tax claim by the Italian government that could have wide-reaching implications for how digital services are taxed across the European Union (EU).

According to Reuters, the three US tech firms have filed appeals against value-added tax (VAT) demands issued by Italy.

Italian authorities have argued that offering users free access to social media platforms in exchange for their personal data constitutes a taxable service under VAT regulations.

This marks a turning point for Italy, which has previously held settlement discussions with tech companies but is now pursuing full-scale legal action.

Notably, Italy is reportedly seeking €887.6 million from Meta, €12.5 million from X, and around €140 million from LinkedIn.

Meta, in response, said it has fully cooperated with the authorities but "strongly disagrees" with the notion that free platform access should trigger VAT liability.

Legal experts suggest the case could extend beyond the tech industry, potentially affecting any business that offers free services in return for user data, such as airlines or retailers using loyalty apps and cookies.

Moreover, Italy plans to present the case to the European Commission’s VAT Committee in November for advisory input.

A formal opinion is expected by spring 2026. If Italy’s stance is upheld, the ruling could reshape digital tax policy across the entire 27-member EU.