Italy's House approves 'Google tax'

Italy's Parliament on Monday passed a new tax on web advertising, called "Google tax," which will require Internet companies to sell ads from locally- registered companies, instead of from units based in havens such as Ireland, Luxembourg and Bermuda.

The tax has stirred controversy, with some lawyers saying it probably violates European Union laws regarding non-discrimination over commercial activity and could be subject to legal challenges.

In July, at the request of the Group of 20 nations, the Organization for Economic Cooperation and Development proposed a blueprint to fight strategies used by companies such as Google Inc, Apple Inc and Yahoo! Inc to shift taxable profits into havens. Italy is the first major European government to pass legislation to combat the problem of moving corporate taxable earnings into havens, which costs Europe and the US over $100 billion a year, since the OECD proposal.