The Milan Tax Court ruled on 20 January 2026 that online sales conducted under consignment agreements do not constitute taxable multilateral digital interface services under Article 1, comma 37, letter b of Law 145/2018, ordering the Italian Revenue Agency to refund EUR 1,041,464.72 in DST paid during 2020–2022.
The Italian Ministry of Economy and Finance has published Judgment No. 292, issued by the Milan Tax Court on 20 January 2026, concerning the application of Italy’s 3% Digital Services Tax (DST) to online sales.
Introduced in 2020, the DST applies to revenue generated from digital advertising targeted at users of a digital interface, multilateral digital interfaces that facilitate direct transactions for goods or services, and the transmission of user data generated through the use of a digital interface.
The Milan Tax Court of First Instance has ruled in favour of an e-commerce company in a dispute with the Italian Revenue Agency over the application of Italy’s Digital Services Tax (DST).
The court found that revenues generated from online sales under consignment agreements did not constitute taxable multilateral digital interface services because the company acted as the direct seller rather than merely facilitating transactions between users and third-party vendors.
As a result, the court ordered the Italian Revenue Agency to refund EUR 1,041,464.72 in DST paid on revenues generated during the 2020, 2021, and 2022 tax years through the company’s online platform.
Key legal controversy and sales models compared
The dispute turned on whether online sales executed via consignment agreements are subject to the 3% Italian DST under Law 145/2018. The ruling analysed two distinct sales models operated by the vendor:
The Marketplace Model (Taxable): Under this model, final customers interact directly with third-party sellers (Partner) on the platform, and the vendor earns a commission for facilitating the sale. The vendor did not contest that this model constitutes a taxable multilateral digital interface and paid the DST accordingly.
The Consignment Model (Non-Taxable): Under these agreements—which the court found equivalent to a “sale-or-return” contract (contratto estimatorio under Art. 1556 of the Italian Civil Code)—suppliers deliver goods to the vendor’s warehouse. The vendor does not immediately acquire ownership. Only after a customer makes a purchase proposal on the platform does the vendor purchase the item from the supplier and finalise the sale to the customer. The refund claim specifically targeted DST paid on revenues from this model.
The tax authority’s position
The Italian Revenue Agency argued that the DST was due because the platform’s general terms allowed customers to directly contact third-party “partners”. Additionally, they argued that the vendor did not bear a general risk of damage or loss of the goods and faced contractual boundaries in setting prices.
The Court’s decision and key findings
The Tax Court of Milan sided with a vendor challenging Italy’s digital services tax, finding that a consignment sales arrangement fell outside the DST’s scope under Article 1, comma 37, letter b of Law 145/2018. The DST targets platforms where users interact with each other to complete transactions—not bilateral deals where a vendor acts as principal.
Why consignment didn’t qualify
The court’s reasoning hinged on four factors.
- Customers couldn’t contact or engage with suppliers through the website itself; any interaction happened off-platform.
- The vendor retained full control as the actual seller, not just a middleman.
- The vendor bore real commercial risk—non-payment, fraud, spoilage of goods sitting in its warehouse beyond 30 days.
- While supplier contracts set price floors to protect brands, the vendor retained final pricing authority.
Outcome and cost allocation
The tribunal awarded a complete refund. Both sides absorbed their own legal costs, a decision the court linked to the DST law’s novelty and absence of established Corte di Cassazione (Italy’s highest court) precedent on the matter.
