How to pay the Digital Services Tax (DST) in Italy

da | Mar 30, 2021 | Web Tax

The obligations related to the italian Tax on Digital Services (DST) have been postponed to 2021 May 16 for payment for the year 2020 and June 30 to submit the tax return. Once fully operational, within the declaration submission term, it will also be possible to submit a corrective declaration for the previous year. If the DST payment obligations is referable to a non-resident company, attention must be paid to the introduction of a passive solidarity principle for the italian-resident company, even if they are part of the the same company group. The passive solidarity regards the declaration and payment requirements relating to DST on behalf of non-resident taxable persons without a permanent establishment in Italy and located in collaborative states.
It should be noted that the appointment of a tax representative in Italy neutralizes jthis responsability.The non-resident company can designate an italian company of the same group to fulfill the obligations but the italian company must a be subjected to the DST too.
The companies subjected to the DST must keep “a special accounting” for the monthly collection of information on the revenues from taxable services and the quantitative elements used to calculate the part of the revenues generated in Italy, for each digital service performed.
There are two relevant documents, to be signed by the company legal representative and kept until the expiry of the verification terms::
1 analytical prospectus of the information, with monthly recording of the revenues and the quantitative elements used to calculate the tax and its settlement to be drawn up within the payment of the tax (May 16);
2 explanatory note of the information on revenues and quantitative elements used to calculate the tax, to be drawn up by the deadline for submitting the return.
The recent circular 3/E by Agenzia delle Entrate introduce a penalties suspension or the first year of application of the DST, given the objective difficulties and uncertainties, with reference to the accounting obligations for any errors or
irregularities committed during the transmission and compilation of the requested data. There are no penalties for violations
committed before the first 60 days following the date of publication of the legislative provision.
The DST is an indirect tax, deductible for IRES and IRAP purposes.
With reference to double taxation at international level, the problem exists, since the benefits of the double tax conventions cannot be applied.

Italian Web Tax still not operating in 2019

da | Apr 29, 2019 | Taxation in Italy, Web Tax

Last budget law (number 148/2018) has anchored the launch of the Italian Web Tax to a very precise timing, linked to the issue (by April 30th, precisely) of a series of measures.

In particular, a decree of the MEF in order to establish «the provisions for implementing the digital services tax “.

At the end of all this, and within 60 days of the Mef / Mise decree, the Italian Web Tax will become operational.

Actually the Mef / Mise decree has not yet been issued.

So, at best, the web tax would have started in the second half of the 2019, now any forecast appears to be risky and the possibility of another false start is far from being remote, as already happened with the rule set forth in previous year’s budget law (205/2017).

The tax on digital services designed last winter in some ways is in line with the work of the European Commission merged into the proposed directive of 21 March 2018. From a subjective point of view, the first condition for the application is identified in the exercise of a business activity.

It is also necessary to overcome, during the calendar year, a double threshold of revenues: the total amount, that is “global” of those realized (not less than 750 million euros) and the total revenues deriving from “digital media services »obtained in the italian territory, which must not be less than 5.5 million euros. The exceeding of the thresholds also takes place at the group level.

At the same time as these two conditions occur, the tax affects both non-resident companies and those resident in Italy, regardless of the nature of the customers, both business-to-business and business-to-consumer revenues.

The Italian web tax, as it was structured, affects all three areas of the digital economy, from e-commerce to multi-sided platforms such as Airbnb, Uber, Foodora, Blablacar, but also activities by Over the top, or the big web portals like Google, Facebook, Twitter, Youtube. In this case, users access the website for free, but in return they give the portals valuable personal information that is the new added value of the digital economy.