- Expansion of Digital Services Tax (DST): Italy’s 2025 Budget Law has broadened the scope of its Digital Services Tax by removing one of the two previous revenue thresholds, meaning that any company with global revenues exceeding €750 million is now subject to DST, regardless of their digital service revenue in Italy.
- Taxable Services and Rates: The DST is set at a 3% excise duty on gross taxable revenues from various digital services, including digital advertising, user interaction platforms, and the sale of user-generated data. The tax applies based on the user’s location in Italy, determined through IP tracking or geolocation methods.
- Compliance and Implications: The DST is calculated on gross revenues without deductions for costs, with updated payment deadlines for advance and final payments. The expansion may discourage investment due to increased tax burdens, and foreign entities could face double taxation as they are not entitled to tax credits or treaty relief.
Source Taxually
