[co-author: Mario Russo]
Company belonging to Euro 750 Mio Group, will pay DST regardless of their digital service turnover in Italy.
The DST is a 3% levy on revenues generated from certain digital services provided in Italy, such as:
- transfer or placing on a digital interface of advertising messages targeted at users of that interface;
- making available a multi-sided digital interface that allows users interaction and may also facilitate the supply of goods or services among users;
- transmission of data collected about users and generated from such users’ activities on digital interfaces.
Businesses subject to the DST must comply to the following payment and reporting requirements:
- By 30 November of each year, an advance payment of 30% of the DST liability calculated on the previous year’s tax base;
- By 16 May of the following year, balance of the DST liability must be settled;
- By the 30 June of each year an annual declaration specifying taxable revenues for the previous fiscal year must be submitted.
The DST applies to both resident and non-resident entities, irrespective of the service recipient’s location or status. Entities subject to DST must, for each fiscal years, calculate their total global revenues from digital services provided to all users (regardless of location) and allocate the portion of these revenues attributable to Italy; in fact, only this allocated portion is subject to Italian DST.
Key takeaway
To comply with the DST obligations, entities must obtain an Italian tax code. While this is generally sufficient for EU/EES entities, non-EU/EES entities are generally required to appoint a fiscal representative to obtain the tax code and fulfil their DST obligations. Due to the complexity of the revised DST framework, a thorough case-by-case analysis is crucial. This will ensure the accurate identification of the supplies within the scope, the correct allocation of revenues to Italy and full compliance with the revised DST requirements.
Reference
Law No. 207 of 30 December 2024 (Italian 2025 Budget law)
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