Italy’s Digital Services Tax (DST) governs the taxation of digital services provided by businesses operating within the country. If you run a business offering digital services in Italy or are planning to start one, it’s important to understand the necessary information to ensure you comply with the law.

In this article, we explain the DST in Italy, including who pays it, which services are taxed, and taxpayer responsibilities.

What’s in this article?

• Digital Services Tax (DST) in Italy
  
• Who has to pay the Digital Services Tax?
  
• Requirements related to the Digital Services Tax
  
• Jurisdiction of the Digital Services Tax in Italy
  

Digital Services Tax (DST) in Italy

Large tech companies and both Italian and foreign digital platforms operating in Italy must pay the tax on digital services, also known as the Digital Services Tax, Digital Tax, or Web Tax.

What is Italy’s Digital Services Tax?

The DST is a tax on income generated from providing digital services, including online advertising, ecommerce platform services, and streaming services. It was established by Article 1, Paragraphs 35–50 of Law 145/2018 and is applied at a rate of 3%.

The purpose of this tax is to align with international legislative efforts—such as those led by the Organization for Economic Cooperation and Development (OECD)—to prevent large global corporations that generate revenue through digital services from avoiding taxes in the countries where they operate.

How to calculate the Digital Services Tax

The tax amount is calculated by applying a 3% rate to the relevant taxable revenues. Any fees earned throughout the tax year are taken into account. As outlined in Article 1, Paragraph 39 of the 2019 budget law, taxable revenues are calculated before deducting the costs related to providing digital services and after subtracting value-added tax (VAT) and other indirect taxes.

Who has to pay the Digital Services Tax?

Article 1, Paragraph 37 of Law 145/2018 states that the DST applies to revenues generated from providing the following services:

• Delivering targeted advertising to customers via digital platforms (e.g., websites, applications, software)
  
• Providing multisided digital platforms that allow customers to interact, including facilitating the direct exchange of goods or services (e.g., social networks or marketplaces)
  
• Transmitting data collected from customers and generated through the use of a digital interface
  

Additionally, the rules for determining who has to pay the DST in Italy were recently changed by the 2025 Budget Law. Here’s what has changed:

Who has to pay the Digital Services Tax?

The requirement to earn at least €5.5 million in revenue from digital services provided in Italy is no longer applicable.

Exemptions from the Digital Services Tax

Article 1, Paragraph 37-bis of Law 145/2018 outlines specific exclusions for certain services, such as:

• Direct sales of goods and services (e.g., ecommerce)
  
• Provision of goods or services ordered through the supplier’s website, where the supplier does not act as an intermediary
  
• Provision of a digital platform whose primary or sole purpose is to offer digital content, communication services, or payment services to customers by the entity operating the platform
  

Requirements related to the Digital Services Tax

If your business is required to pay the DST, there are a few legal requirements you must comply with:

Annual declaration

By June 30 of each year, businesses must electronically declare revenue earned in the previous calendar year. To do this, they should fill out and submit the DST form on the Italian Revenue Agency website, which can be submitted either directly or through an intermediary (such as an accountant).

Deadlines and methods of payment for the Digital Services Tax

After declaring your revenue, you must submit payment by the relevant deadlines. The Budget Law has also introduced changes regarding the timing and methods of paying the DST. Until 2024, the tax had to be paid in a single installment by May 16 of the year following the year of the tax obligation.

Since the change, the payment must be made in two installments using the F24 form:

• An advance payment: This is equal to 30% of the tax due for the previous calendar year and should be paid by November 30 of the year of the tax obligation.
  
• The remaining balance: This amount should be paid by May 16 of the following year.
  

Tax codes for paying the Digital Services Tax with the F24 form

As established by Resolution No. 14/E of March 1, 2021 from the Italian Revenue Agency, you must use the following tax codes on the F24 form to pay the DST:

• 2700 DIGITAL SERVICES TAX–Article 1, Paragraphs 35–50, of Law no. 145 of December 30, 2018, as amended
  
• 2701 DIGITAL SERVICES TAX–Article 1, Paragraphs 35–50, of Law no. 145 of December 30, 2018, as amended—INTEREST
  
• 2702 DIGITAL SERVICES TAX–Article 1, Paragraphs 35–50, of Law no. 145 of December 30, 2018, as amended—PENALTY
  

Keeping up with changing tax regulations can be challenging for your business. Tools such as Stripe Tax allow you to calculate, collect, and file taxes on a single platform.

Jurisdiction of the Digital Services Tax in Italy

The jurisdiction of the DST depends on the geographical location of the customer, regardless of where the digital service provider is located. This tax only applies if the customer is located in Italy and not if they are located abroad. A customer’s geographical location can be determined through the Internet Protocol (IP) address or other geolocation systems, in compliance with personal data protection regulations.