In the Circular letter no. 3/E, published on 23rd March 2021, the Italian Tax Authority clarifies various issues related to the Italian Digital Services Tax (ITA-DST), that entered into force on 1st January 2020 and replaced the Italian “Web Tax”.
The Italian Tax Authority clarifies, in particular:
ITA-DST shall be due by subjects carrying out business activities that, individually or at group level, jointly meet, in the previous fiscal year, the following thresholds:
ITA- DST applies to revenues derived from the following services:
Revenue is considered as taxable when invoiced and the tax is due if the user of a taxable service is located in Italy.
The following services are not considered as digital services for the purposes of the ITA-DST:
ITA-DST taxable revenues are assumed gross of costs and net of VAT and other indirect taxes. The fees related to the provision of a digital multilateral interface that facilitates the sale of specific products subject to excise duties, having a direct and inseparable connection with the volume or value of such sales, are not considered.
ITA-DST rate and compliance obligations
ITA-DST rate is equal to 3% and applies on revenues from digital service generated on a calendar year basis, starting from 2020.
ITA-DST must be paid and the annual ITA-DST return must be filed by respectively 16th May and 30th June of the calendar year following the one of receipt and accounting of the relevant taxable consideration.
As for groups of companies, a single group entity must be named for the fulfilment of the obligations related to ITA-DST for the whole group.
Non-resident subjects without a permanent establishment in Italy and subjects established in a State other than a European Union Member State or of the European Economic Area with which Italy has not concluded a mutual assistance agreement for the recovery of tax claims, must appoint a Tax Representative for the fulfilment of the ITA-DST obligations and payments.