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Italy delays Digital Services Tax collections

The Italian authorities have postponed the 2020 collections of its 3% Digital Services Tax from 16 February until 16 March 2021. The associated annual return is delayed until 30 April 2021.

The turnover tax was introduced for the 2020 financial year is chargeable on income from Italian residents from:

  1. Advertising income for digital platforms and marketplaces promoting to consumers and businesses
  2. Charges, subscriptions etc. to customers giving them access to users on platforms
  3. Sale of user data gathered by platforms

The threshold for the above income to be taxable are: €5.5m Italian revenues; or €750m annual revenues. This is at the group level; so local subsidiaries must roll-up all company-wide Italian revenues. The prior year calendar year is used for the basis of determining if the thresholds have been passed – so 2019 is used to determine 2020’s threshold.

The liability extends to non-resident businesses who must appoint an Italian fiscal representative.


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