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Published: Friday February 28, 2014 MYT 9:35:03 PM
Updated: Friday February 28, 2014 MYT 9:37:01 PM

Italy cancels 'Google tax' on web companies

Italy's Prime Minister Matteo Renzi talks with State Secretary to the Prime Minister Graziano Delrio (R) during a confidence vote at the lower house of the parliament in Rome February 25, 2014. REUTERS/Giampiero Sposito

Italy's Prime Minister Matteo Renzi talks with State Secretary to the Prime Minister Graziano Delrio (R) during a confidence vote at the lower house of the parliament in Rome February 25, 2014. REUTERS/Giampiero Sposito

ROME (Reuters) - Italy has dropped a planned internet tax sometimes dubbed the "Google tax", in one of the first measures enacted by the new government of Matteo Renzi, an official said on Friday.

The former government of Enrico Letta passed a law on the tax last year, but promptly delayed the date it would come into effect until July. The European Commission warned that it could break EU rules before it was approved in parliament.

The tax, designed to ensure firms that advertise and sell in Italy do so only through companies with a tax presence there would be cancelled, Graziano Delrio, Renzi's chief of staff, told a press conference.

(Reporting by Naomi O'Leary)

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