Italy's PM says any decision on web tax is sovereign one

NATO Alliance summit in Watford

MILAN (Reuters) - Italy's prime minister said on Wednesday that any decision on the introduction of a digital tax that would hit U.S. tech giants falls within a country's sovereign sphere and ties with the United States can have no bearing in such a matter.

Addressing a press conference in London after a NATO summit, Giuseppe Conte said Italy's relationship with Washington would always remain a very important one and Rome did not expect any U.S. tariffs that could damage Italian companies.

"The United States is fundamental and we will always maintain a privileged connection with it but when it comes to...policy decisions we're a sovereign state," he said in answer to a question on the introduction of a digital tax and possible retaliation from Washington.

"We can exchange opinions and evaluations, but then it's the sovereign state that decides."

Italy's 2020 budget introduces a 3% levy on revenue from internet transactions for digital companies with sales of at least 750 million euros, at least 5.5 million euros of which are reaped in Italy.

U.S. President Donald Trump's administration has repeatedly said the levy unfairly targets U.S. firms. Two other major European countries, Britain and France, also plan digital taxes affecting U.S. internet giants.

Trump has threatened retaliation against France over its plans. A senior U.S. official has said Trump was ready to warn of the same against Italy when he met Italian President Sergio Mattarella in Washington last month.

Asked about his exchanges with Trump in London, Conte said they had not discussed the issue of 5G technology, adding that Italy had advanced legislation to select firms for 5G services.

Trump said on Wednesday that Chinese telecommunication firm Huawei was a security risk after NATO said it needed secure next-generation 5G technology.

"Italy has introduced an advanced and sophisticated set of rules [on 5G] ... and it's matter of applying them," Conte said.

(Reporting by Valentina Za; Editing by Mark Heinrich)