Italy: Passage of annual budget including digital service tax of 3 percent

The Italian Senate passed the 2020 Budget Law to the Chamber of Deputies. It includes the establishment of a new operational digital service tax. The tax applies to the following services: (1) targeted advertising, (2) provision of a digital interface that allows interaction between users, and (3) transmission of data. The tax rate is set at 3% of the revenue generated from subjected services. The service has to be provided to a person resident in Italy. A global annual threshold of € 750'000'000 and a local annual threshold of € 5'500'000 for subjected services apply. The tax shall be effective as of 1 January 2020.