Italy: Implementing decree for digital services tax; new deadlines

Italy: Implementing decree for digital services tax

The Italian tax authority published a new decree to implement the rules concerning the digital services tax.


The implementing decree was published in draft format on 17 December 2020 and then subject to a consultation period that ended 31 December 2020.

As approved, the final text of the implementing decree reflects several changes from the draft document, including that the new deadlines are now 16 March 2021 for payment of the digital services tax for FY 2020 and 30 April 2021 for filing of the of the annual return for the digital services tax.

Other measures in the final version of the decree include:

  • Definition of “multilateral digital interface”—an interface that allows users to be in contact and to interact with each other, also for the purpose of facilitating the direct provision of goods and services. The new definition seems broader than the prior definition of this term, one that referred to interfaces allowing users to upload and share digital content with other users, facilitating the underlying supplies of goods or services directly between users.
  • Tax thresholds—the threshold of €5.5 million of digital services generated in Italy refers to revenue that is received rather than realized; therefore, the criterion is to be met on a cash basis rather than an accounting basis.
  • Liability of the group representative—the group representative entity is jointly liable, together with the group companies that have appointed the representative, for their tax payments and reporting obligations.
  • Digital services tax, group representative—the group representative must be one a resident of or established in Italy. The draft version stated that the selected representative must be one of the taxable entities that is a resident of or established in Italy. It is not clear whether the new wording means that there is an obligation to appoint an Italian entity of the group even if that entity is not subject to and liable for the digital services tax. A non-resident taxable entity, established in a country other than an “uncooperative jurisdiction,” could be appointed as digital services tax group representative if there are no Italian resident or established entities.
  • Italian entity responsibility—even if it is not a taxable entity for the purposes of the digital services tax, an entity that is a resident in Italy and part of a group with non-resident taxable entities is jointly liable, together with those non-resident taxable entities that are established in a country other than an uncooperative jurisdiction, for the digital services tax payments.

Read a January 2021 report [PDF 180 KB] prepared by the KPMG member firm in Italy

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