Digital tax postponed to 2021. “Good news for Italian wine”, commented Unione Italiana Vini (UIV)

At the moment, there is no digital tax, at least in Italy. The Council of Ministers (Friday, February 16, 2021) postponed the deadline for payments regarding the tax on digital services for 2020, from February 16 to March 1, 2021 as well as postponing the deadline for submitting the relative declaration from March 31, 2021 to April 30, 2021. This deferral, for better or for worse (it has been estimated that this tax could fill the State coffers with 600-700 million euros a year), suggests that, at least for the immediate future, Italy will still be safe from any new retaliation coming from the United States (whose companies, or, rather, the giants of the web, would be affected the most), starting with wine, which was one of the major targets for potential revenge. The Unione Italiana Vini (UIV), Italian Wines Union, commended the news and commented, “the temporary delay to the digital tax that our Council of Ministers has decided, also welcomes Unione Italiana Vini’s indication for a gesture of opening towards the new Biden administration, which will take office on January 20th, 2021. And, a multilateral agreement on this complex matter is certain to be found within the first few months of 2021. It is no coincidence that in these past several days the European Commission as well as the OECD have published their separate new proposals on the subject of digital taxation”, said Paolo Castelletti, General Secretary of the Italian Wines Union.
“The decision the Council of Ministers has made”, added Castelletti, “is as wise as it is essential for the Italian wine world, because there was a high risk of once again seeing wine products overwhelmed due to an international dispute and potentially penalizing measures, in a moment of extreme uncertainty for the international economic context”.
The tax on digital services (DST) was supposed to be in force definitively in Italy starting on February 16th. The United States Trade Representative (USTR) subsequent report on the subject considered Italian taxation discriminatory towards American digital companies, which represent two thirds of the companies to be taxed. According to Unione Italiana Vini (UIV), this approach would have been a high risk for retaliation actions that had already been brought (and then suspended) against France, also a promoter of the tax. As we had said, the tax on digital services for Italy expects to yield a fee of approximately 700 million euros for Italy. Italian wine, which sells 30% of its exports in value (1.7 billion euros) to the United States, would be one of the major targets among Italian products in danger of retaliation. According to the Osservatorio di Unione Italiana Vini (customs base), imports of Italian still wines closed the first 11 months of 2020 substantially stable (-0.1%) compared to the same period in 2019, for a total of almost 1.35 billion US dollars. This result has allowed Italy to surpass France (-31.3% in value), Spain (-12.3%) and Germany (-33.4%), which have to bear additional duties of 25% on wines that the USTR arranged because of the Airbus affair.