Digital Services Taxes (DST) making a comeback as OECD Pillar 1 in danger of missing 2023 impementation? DST’s are a new class of taxes being implemented to tackle the perceived unfairness of non-resident digital companies to sell across borders without being liable to local corporate income taxes. They are typically a percentage charge of turnover from in-scope activities, with a sales threshold based on in-country and global income.
The OECD’s Inclusive Framework proposal has been adopted by 137 countries, to reform and harmonise the tax treatment of foreign digital income and minimum tax rates. This includes ‘Pillar 1’ which would relocate the right to tax to the country of consumption and therefore eliminate the need for DST’s. Note: VAT on digital services is not included.
Europe Digital Services Taxes (DST)
| Country | Status | Rate | Annual sales threshold | Scope | |
| In-country income | Global income | ||||
| EU Digital Levy | Paused | 3% | EU €50m | €750m | Marketplaces; advertising |
| Austria | Jan 2020 | 5% | €25m | €750m | Advertising |
| Belgium | Paused | 3% | €5m | €750m | Advertising; Intermediation; Data Transmission |
| Czech | Proposed | 5% | CZK 100m | €750m | Advertising; digital services |
| Denmark | Jan 2024 | 6% | Streaming video | ||
| France | Jan 2019 | 3% | €25m | €750m | Digital interface; advertising; user data |
| Greece | Jul 2019 | Nil | n/a | Tourist accomodation | |
| Hungary | Jul 2019 | 0% to Dec 2022; then 7.5% | HUF 100m | n/a | Media content; Advertising |
| Italy | Jan 2020 | 3% | €5.5m | €750m | Advertising; digital interfaces; user data |
| Latvia | Paused | 3% | €750m | Digital interface; advertising; user data | |
| Norway | Paused | Subject to progress on OECD plans | |||
| Poland | Jul 2020 | 1.5% | Streaming media and Audiovisual media service and audiovisual commercial communication | ||
| Poland 2 | Proposed | 7% | Digital services | ||
| Portugal | Feb 2021 | 1.5% | Video-sharing platforms and subscription TV streaming (1%) | ||
| Portugal 2 | Proposed | 7% | Streaming video services | ||
| Slovenia | Proposed | Advertising; user data | |||
| Spain | Jan 2021 | 3% | €3m | €750m | Advertising; user data |
| Turkey | Mar 2020 | 7.5% | TRY 20m | €750m | Advertising; Content; social media |
| UK | Apr 2020 | 2% | UK £25m | £500m | Marketplaces; Social media; search engines |
Asia Pacific Digital Services Taxes (DST)
| Country | Status | Rate | Annual sales threshold | Scope | |
| In-country income | Global income | ||||
| India | Jun 2016 | 6% | Rs 2cores | n/a | Advertising |
| India | Apr 2020 | 2% | INR 20m | n/a | Goods and digital services sellers and facilitating marketplaces |
| Indonesia | Mar 2020 | TBC | E-commerce | ||
| Laos | Feb 2024 | TBC | Streaming; ad's; travel & hotel online | ||
| Nepal | Jul 2022 | 2% | Electronic & digital services | ||
| New Zealand | Proposed | 2-3% | NZ$3.5m | NZ$1.1bn | Social media; Content sharing; Search engine; user data; Intermediation; |
| Pakistan | Sep 2021 | 2% | Nil | Nil | Withholding tax on marketplaces |
| Kyrgystan | Jan 2022 | 2% | Nil | Nil | Tax on digital services B2B and B2C |
| Sierra Leone | Jan 2021 | 1.5% | Digital and electronic services | ||
| Vietnam | 2021 TBC | 1.5% | Ecommerce tax on marketplace revenues | ||
Americas Digital Services Taxes (DST)
| Country | Status | Rate | Annual sales threshold | Scope | |
| In-country income | Global income | ||||
| Argentina | Dec 2020 | 5%, 10%, 15% | Online gambling | ||
| Brazil - 1 | Proposed | 1-5% | BRL 100m | BRL 3bn | Advertising; user data; interfaces; |
| Brazil - 2 | Proposed | 3% on COFINS | BRL 78m | $240m | Advertising; platform services for selling goods and services |
| Brazil - 3 | Proposed | 3% | BRL 4.5bn | Advertising; platform interaction services; data | |
| Brazil - 4 | Proposed | 3% - 10% | BRL 100m | Media; apps; gaming; gambling (10%); software | |
| Brazil - 5 | Proposed | 3% | Advertising; user data; payment platforms; media | ||
| Canada | Jan 2024 | 3% | CAD 20m | €750m | Advertising, online marketplaces, social media and the sale/licensing of user data. |
| Colombia | 2023 | 5% | US$ 264k | - | Advertising; streaming or download media; user data; e-learning - Significant Economic Presence test |
| Costa Rica | Nov 2019 | Tourist accommodation rentals | |||
| Paraguay | Jan 2021 | 4.5% | Non-resident: media; gaming; data processing; advertising; gambling; software | ||
| Uruguay | Jan 2018 | 12% | Digital services Non-residents | ||
Africa & Middle East Digital Services Taxes (DST)
| Country | Status | Rate | Annual sales threshold | Scope | |
| In-country income | Global income | ||||
| Israel | Proposed | 3%-5% | Digital interface; advertising; user data | ||
| Kenya | Jan 2021 | 1.5% | n/a | nil | Digital interfaces services, including most non-resident e-services |
| Nigeria | Jan 2022 | 6% | NGN 25m | Content; customer data; goods & services; and intermediary services | |
| South Africa | Proposed | ||||
| Tanzania | Jan 2022 | 2% | Digital or electronic services | ||
| Tunisia | Jan 2020 | 3% | Apps; digital services (non-resident only) | ||
| Zimbabwe | Jan 2020 | 5% | Digital and ecommerce | ||
