The Irish Revenue has released eBrief No. 301/24, which provides an update to the Tax and Duty Manual (TDM) Part 04-06-03, effective 5 December 2024. This update confirms Revenue’s acceptance of certain Digital Services Taxes (DSTs) as deductible expenses, provided they are incurred exclusively for the purposes of a trade.
The updated list of deductible DSTs includes:
- Austria’s Digital Services Tax
- France’s Digital Services Tax
- Italy’s Digital Services Tax
- Kenya’s Digital Services Tax
- Spain’s Digital Services Tax
- Turkey’s Digital Services Tax
- United Kingdom’s Digital Services Tax
- India’s Equalisation Levy
- Canada’s Digital Services Tax
Digital Services Taxes (DSTs) are levied in multiple jurisdictions and typically apply to revenues generated from digital services and advertising activities. These taxes aim to capture revenue from digital business operations within specific markets.
The purpose of TDM Part 04-06-03 is to provide clear guidance on the tax deductibility of DSTs. Revenue has clarified that DSTs incurred wholly and exclusively for trade purposes may be treated as deductible expenses when computing the taxable income of that trade.
