Type: Legislation
Italy’s 2025 Budget Law removes the €5.5 million annual revenue threshold for its 3% Digital Services Tax (DST), broadening its scope to include more non-resident digital service providers, particularly those with ancillary digital activities. The remaining threshold of €750 million global revenues targets large multinational companies, taxing gross revenues derived from Italian users. This turnover-based tax applies to services like online advertising, digital platforms, and user data transactions. Italy’s move reflects impatience with the OECD Pillar 1 tax negotiations, which aim to reform taxing rights for cross-border digital services. Similar DSTs exist in countries like France and Spain, but Italy’s action signals a push to raise revenue amid stalled international reform efforts.
Effective Date: January 1, 2025
