[alemhnan]

Maybe I'm wrong, but with this law Google is not able to sell ads in Italy. So if they still want to do that they need to open an Italian company and therefore pay taxes in Italy. So, for Italy at least, things would change.

[Dylan16807]

Right, but blocking sales to another country has absolutely nothing to do with how an entity in another country pays their taxes. Italy is objecting only to the fact that the ad-selling-Google is in another country, and trying to make them build a local version.

[tonfa]

Depends, what is taxed in Italy: profit or revenue?

An italian subsidiary would have to pay its mother company for the services it provides (which is everything, since no user would be serviced from Italy). So the Italian company could easily make 0 (or very few) profit.

[waps]

Doesn't matter. Italy is not a sovereign state, and has no legal control over inter-EU commerce any more than a US state has. They have signed over the right to make laws like this to the EU, which seems unlikely in the extreme to concur with their decision.

So despite being a law, it's (probably) not legal. I find it very hard to believe that there is anyone in the Italian parliament, which is filled with lawyers, that doesn't know this. They are merely voting in this law to appease constituents, and of course the targets of this law (not just Google, but any internet seller. It's just as much apple or microsoft or kickstarter.com) have zero incentives to point this out : they simply don't pay, knowing full well they can't be sued for this.

So constituents are "happy", lawyers get re-elected and nothing changes. There are no implications, everything will simply remain status-quo.