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The new rules on digital taxation proposed by the European Commission on 21 March 2018 represent an opportunity to summarise the position of the G20, the OECD, the EU and Italy on how to address the tax challenges of the digital economy. LED Taxand, Taxand Italy, provides an overview.
To date, the measures proposed which seem to better address the problem are: (I) a long-term solution consisting in a new nexus in the form of a significant digital presence and (II) an interim solution consisting in an excise tax applicable to revenues derived from certain digital activities (the so called “web tax”).
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The 2018 Italian Budget introduced starting from 2019 a new tax on digital services provided to Italian enterprises and Italian permanent establishments of foreign entities. The definition of digital services will be specified by an implementing Decree. Such tax will be levied at 3% rate on the value of each transaction. It will apply to resident and non-resident digital service providers which in a calendar year carry on more than 3.000 transactions.