New Federal Government commits to 3% Digital Services Tax by 2027
Belgium’s new coaltion government included a commitment to introduce a 3% Digital Services Tax (DST) by 2027. This was contained within ‘Federal Coalition Agreement 2025-2029’, or “Arizona deal”. Belgium had considered a DST in 2020, but it was on hold waiting on OECD and EU progress.
DST’s are taxes on revenue or turnover derived from the provision of a social media service, a search engine or an online marketplace to customers. They have been developed to address earnings made by non-resident digital service providers (largely from the US) which fall outside of the regular corporate income tax regime of resident providers. Follow our global DST tracker to see who has implemented or has on pause a DST.
The EU Digital Services Tax proposal is on hold as the OECD champions a global reorganisation of taxes on overseas digital services via Pillar 1. Most countries with DST’s had agreed a moratorium on changes until the OECD had completed the Pillar 1 reforms to avoid the US retaliating with trade sanctions.
Belgium acts as OECD Pillar 1 digital tax agreement falters
However, following the US Republican 2024 victories in Congress and the White House, it seems likely that the Pillar 1 will not progress. The new President Trump issued an Executive Order stating: “Any commitments made by the prior administration on behalf of the United States with respect to the global tax deal have no force or effect within the United States, absent an act by the Congress adopting the relevant provisions,”
This has prompted Belgium (and other countries like France and Italy) to bring back its DST proposals. Belgium may now enact a DST unilaterally or in coordination with the EU.
The Belgium DST will likely apply to any company generating revenue arising from the following services:
- the placing on a digital interface of advertising targeted at users of that interface;
- the making available to users of a multi-sided digital interface which allows users to find other users and to interact with them, and which may also facilitate the provision of underlying supplies of goods or services directly between users; and
- the transmission of data collected about users and generated from users’ activities on digital interfaces.
The DST will be only be applicable to entities that exceed the following thresholds:
- the total amount of worldwide income reported by the entity for the relevant financial year exceeds €750m; and
- the total amount of taxable income obtained by the entity in Belgium from digital activities during the relevant financial year exceeds €25m.