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The Italian Revenue Agency opened the public consultation on the draft regulation on digital service tax in Italy

The Italian Revenue Agency published the draft regulation on digital service tax, introduced by the 2019 Budget law and in force starting from the 1st of January 2020.

The long-awaited regulation defines the rules for implementing the tax at issue. Considering the complexity of the matter, as announced, the Revenue Agency opened a public consultation allowing professionals and business operators to present their comments by the 31st of December 2020.

The final version of the regulation will be therefore available only at the beginning of 2021.

Compared to what already provided by the law provision, the draft regulation includes a number of practical indications for the payment of the tax, the drafting and filing of the tax return and the related obligations and formal steps to be accomplished in this respect by resident and non-resident taxpayers.  The regulation also includes the model reports to be used to fulfill the specific accounting obligations provided for this tax.

At the moment, however, the regulation does not seem to solve all the doubts raised by the market operators at the entry into force of the tax and that are crucial to correctly define the scope of this tax nor its practical implementation.

It is worth remembering that the first payment of the digital service tax for the fiscal year 2020 is due by February 16, 2021 while the tax return shall be filed by the end of March 2021. By the deadline for the payment of the tax, taxpayers shall also prepare the accounting reports including the data used for calculating the tax for the relevant fiscal year.

The mentioned criticalities will be commented in detail in the submission that will be made in response to the public consultation and, hopefully, they will be at least partially incorporated in the final version of the regulation. In any case, the issuance of a circular letter would be appropriate to better clarify the unclear points and allow taxpayers to correctly calculate the tax due. The drafting of such circular letter should be already in progress and it is hoped that it will be published in time before the deadline for the first payment.  

Authors

Picture of Stefano Giuliano
Stefano Giuliano
Partner
Rome
Valeria Romagnoli
Senior Associate
Milan