The Italian Budget Law 2020 introduces a 3% unilateral ‘Digital Services Tax (DST)’ replacing the “Web Tax” and entered into force as of 1 January 2020. The Digital Services Tax (DST) rate is 3% and applies on the revenues from digital service generated on a calendar year basis, starting from 2020.
Taxable persons are required to pay the DST by 16 February of the calendar year subsequent to the one of reference and to file by 31 March of the same year, an annual return stating the amount of taxable revenues generated in the previous FY (i.e. for the year 2020, the payment is due by 16 February 2021 and the tax return is to be filed by 31 March 2021).
The DST shall be due by subjects carrying out business activities that, individually or at group level, jointly meet, in the previous fiscal year, the following thresholds:
- Total amount of revenues (wherever arising) equal to or exceeding €750,000,000;
- An amount of revenues from digital services (arising in Italy) equal to or exceeding €5,500,000.
The DST applies only to revenues derived from the advertising on a digital interface, provision of a digital multilateral interface, transmission of data collected from users and generated by the use of a digital interface. However, revenues that, although derived from the mentioned digital services, are considered “intercompany” are excluded from the taxable base.
