Google announced the opening of an Italian subsidiary that will take care of cloud services in our country. And he will also pay taxes to the Italian tax authorities. This announcement is accompanied by the opening of two new regions in Italy, in Milan and Turin.
Opening of Google Cloud Italy Srl: Google will pay taxes in Italy (or at least VAT for the cloud)
Google had promised investments in our country and therefore announces that will open two regions of its cloud computing service in Milan and Turin. The two new regions will provide services in the two capitals, where there is a growing demand for cloud services due to the surge in digital transformation of large and small businesses present in the region.
But perhaps the most important aspect is another. And it’s about taxesalways a hot topic. The fact is that still big companies like Google, Apple, Microsoft, etc. they don’t pay taxes in Italy, but in other EU countries such as Luxembourg (where Amazon is located, for example) or Ireland (where Google Cloud was located, until recently). In this way, these giants manage to pay much less tax than they should if they have done so in the country where they are selling the service or product.
However, something is moving in this very delicate balance. The European Union announced a year ago its desire to introduce taxes on the tech giants and, more recently, an agreement had been reached to set a valid minimum tax between the main countries.
In this rapidly evolving scenario, Google communicated to its customers via email that “we will establish a dedicated legal entity to provide cloud services in the country: Google Cloud Italy Srl (“Google Cloud Italy”). Accordingly, all Google Cloud and Google Workspace (formerly G Suite) accounts and customer and partner agreements with a billing address in Italy will be migrated from Google Ireland Ltd to Google Cloud Italy over the next few weeks […]. Additionally, you will start to receive an e-invoice with Italian VAT (in addition to your Google Commercial Invoice) to meet local requirements.”
There will be few changes for Italian customers, the biggest differences being that Google will issue the e-invoice and apply Italian VAT. An important difference will be that from now on Google will pay taxes in Italy, at least for cloud and Workspace and at least for VAT. The search giant is not the only one to follow this path: also netflix recently communicated to its customers by e-mail the opening of its own Italian branch with local VAT number.
Public opinion is changing and moving towards a demand for greater responsibility from the American web giants, which have so far cultivated their own interests by exploiting loopholes in the legislation of various countries and the Union. European Union and thus subtracting significant resources from local tax revenue. And while this is perfectly understandable from the point of view of the company which must look out for its own interests, what John Donne said is just as true: no one is an island. Neither do the big tech companies that have to operate within the vilified society and, one might say, also have to make your contributionbecause they reap all the benefits.
Google, like Netflix, is a first step towards greater fairness towards Italian companies and citizens who pay taxes in Italy. We will see if the other big names will follow and how.