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Italy: Digital services tax, changes made during legislative process

Italy: Digital services tax, changes made during legisl

Changes have been made to the proposed digital services tax during the legislative process.


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The digital services tax proposal is included in the budget law 2020. The Italian upper chamber (Senato della Repubblica) on 16 December 2019 approved the budget law 2020, and sent the legislation to the lower chamber (Camera dei Deputati) for its consideration.

The following changes were made by the upper chamber to the digital services tax provisions of the budget law 2020:

  • Any preliminary analysis to verify whether certain services provided by Italian or foreign suppliers (whether business-to-business or business-to-consumer customers located in Italy) could be viewed as coming within the scope of the digital services tax.
  • Retroactive analysis of FY 2019 would be required in verifying whether certain revenue thresholds are met; thus, a supplier could be subject to the digital services tax as from 1 January 2020.
  • Persons subject to the digital services tax would need to establish a special monthly ledger with respect to revenues that would be subject to the tax.
  • Persons subject to the digital services tax not established in Italy would have to obtain a digital services tax identification number or appoint a tax representative in Italy to remit payments of the tax and to comply with reporting requirements.
  • The first payment of the digital services tax for FY 2020 would be due 16 February 2021, and the first digital services tax return would be due 31 March 2021.

KPMG observation

Taxpayers that could be subject to the digital services tax need to immediately consider possible implications of the changes made by the upper chamber (as noted above) and whether there are action steps that require immediate attention.

Because the budget law must be finalized by 31 December 2019, tax professionals believe that the lower chamber would not have time to make any further changes to the digital services tax proposals because any such amendments would have to be returned to and approved by the upper chamber.

Read a December 2019 report [PDF 205 KB] prepared by the KPMG member firm in Italy—that includes an unofficial English translation of the digital services tax legislation, with legislative changes highlighted in bold

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