Italy’s 2025 Digital Service Tax (DST) Updates: Key Changes & Deadlines

The 2025 Budget Law (Budget Law), adopted at the end of 2024, brought several changes relevant to VAT and compliance, such as the extension of the reverse charge in the logistics sector, small businesses VAT scheme, and VAT on online events. However, the Budget Law also introduced significant novelties related to the Digital Service Tax.

2025 Budget Law Rules for Digital Service Tax (DST)

The adoption of the Budget Law marked the removal of the EUR 5.5 million national threshold for annual revenue for digital services providers. The removal of the national threshold means any level of revenue in Italy will be subject to DST if the digital service provider exceeds the global revenue threshold set at EUR 750 million.

This means that even more digital service providers will be subject to DST. Now, even providers with small digital activity in Italy must pay DST for their services.

The Budget Law also introduced two new payment requirements. Businesses subject to DST must make an advance payment equal to 30% of the due DST by November 30 of each calendar year for the preceding calendar year. The second payment requirement states that the full payment of the owed DST must be made by May 16 of the year following the reference year.

In other words, all those who owe DST for 2024 must pay 100% until May 16, 2025. By November 30, 2025, all companies subject to DST must make an advance payment for 2025 due DST, equal to 30% of the DST paid for 2024.

It is essential to note that the reporting requirements remained the same. All taxable persons must submit their annual returns for the previous reporting year by June 30 of the following calendar year.

Conclusion

The 3% DST applies to revenue generated from the services, such as advertising on a digital interface, a multilateral digital interface allowing users to buy and sell goods and services, and the transmission of user data generated from a digital interface.

Companies that meet the criteria and provide in-scope services must take all the necessary steps to comply with reporting, accounting, and payment obligations that took effect on January 1, 2025.

Source: Deloitte, EY, VATabout