In a press release dated 9 March 2021 (in Italian), Italy’s Ministry of Finance announced (for the second time this year) plans to postpone the first-ever deadlines for:

  • paying the digital services tax (DST) from 16 March 2021 to 16 May 2021; and
  • filing the DST return from the end of April to the end of June.

The Italian DST is a 3 per cent tax that applies to revenues generated by:

  • digital targeted advertising – placing advertising on a digital interface targeted at users of that interface;
  • intermediation services – hosting a multi-sided digital interface that allows users to interact and facilitates the direct supply of goods or services; and
  • data transmission services – the transmission of data collected from users generated from the use of a digital interface.

Revenues from these activities ('digital revenues') are taxable in Italy if the user is located in Italy. (The specific rules on ‘location’ are set out in the DST laws and regulations.)

The Italian DST applies to taxpayers generating (at a group level) worldwide revenues of at least €750m and digital revenues realised in Italy of at least €5.5m.

The DST return form (PDF), the filing instructions (PDF) and relevant guidance (in Italian) are available on the website of the Italian tax authorities.

Under a so-called ‘sunset clause’, Italy is expected to withdraw its domestic DST if or when internationally agreed principles on the taxation of the digital economy are implemented.

Despite US attitudes to the latest OECD proposals on the taxation of the digital economy changing under the Biden administration (notably the US Treasury Secretary Janet L. Yellen’s commitment to find ‘workable solutions in a fair and judicious manner’), it’s unlikely that the sunset clause will apply before the upcoming new deadlines.