On 18 February 2020, the Spanish Cabinet reportedly approved a draft bill for the introduction of a digital services tax (DST). A 3% DST will be applicable for large companies whose respective groups have revenue of at least EUR 750 million worldwide and EUR 3 million in revenue from digital service activities in Spain.
The digital services tax (DST) would apply to both domestic and cross-border digital service transactions including transactions between related parties. Companies that are subject to tax would have to submit periodic returns, and non-residents would have to appoint a tax representative in Spain. The Bill now moves to the Parliament for approval. If approved, it will come into force three months after it is published in the Spanish Official Gazette. It is expressly foreseen that, if approved, the filing and payment of the DST corresponding to 2Q and 3Q 2020 will not be due until 20 December 2020.
