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Italy: Digital services tax proposed to apply beginning 1 January 2020

Italy: Digital services tax beginning 1 January 2020

A draft law decree, approved on 15 October 2019, would amend a prior version of the Italian digital services tax as introduced by the Budget Law 2019.


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The version of the digital services tax contained in the Budget Law 2019, however, was never made effective because implementing measures were not adopted.

With the October 2019 draft law decree, the digital services tax would be imposed at a rate of 3% on revenues generated from certain business-to-business and business-to-consumer digital services that are provided to Italian customers by companies or groups of companies that satisfy certain criteria. For these purposes, entities subject to the digital services tax (whether separately or on a group basis) would have to satisfy both of the following requirements for the calendar year prior to the year in which the taxable revenue was obtained:

  • Total worldwide revenue of not less than €750 million, and
  • Revenue of not less than €5 million obtain in Italy from the digital services

The digital services tax would apply to revenue resulting from the following services:

  • The placing on a digital interface of advertising targeted at users of that interface
  • The making available to users of a multi-sided digital interface that allows the users to be in contact and to interact with each other, and that may also facilitate the provision of underlying supplies of goods or services directly between users
  • The transmission of data collected from users and generated from the use of digital interfaces

The taxable revenue would include total gross revenues (net of VAT and other indirect taxes).

The digital services tax is proposed to be effective 1 January 2020. It can be repealed when (and if) internationally agreed provisions on digital economy taxation become applicable (this is referred to as a "sunset clause").

Read an October 2019 report [PDF 190 KB] prepared by the KPMG member firm in Italy (and that includes an unofficial English language translation of the proposed digital services tax rules)

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