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Is VAT due on the ‘free’ supply of digital platforms?

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News that the Italian authorities are assessing Meta for VAT on the supply of Facebook has thrown into the spotlight the issue of whether VAT is due on the supply of ‘free’ digital services. It is arguable that there is the requisite link between such supplies and non-monetary consideration in the form of user data. There are undoubtedly difficulties in determining the taxable amount but cases on ‘free’ banking services and a parallel claim against Meta in the Competition Appeal Tribunal indicate that methodologies are available. Although a legal pathway is possible, this will ultimately be determined by a policy choice on how to address the value of harvesting data.

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