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Tax Pills

  • Italy’s Revenue Agency draft guidelines to implement Digital Services Tax. The results of the public consultation and the new fiscal calendar fixed by a Revenue Director Decision

    servizi digitali

    On mid December 2020, Italy’s tax authority released online the text of its Director draft Decision, or measure, providing the full range of administrative rules needed to implement the new Digital Services Tax (DST). Operators, associations, law firms and professionals were invited to provide their comment by 31 December, that is within the end of the year. Now that the initiative has been completed, the Agency provides the first results. Once the opinions and suggestions received have been collected, the Revenue Agency has decided to postpone both the dates for payment and for sending the relative tax return by 1 month, in order to gain the time necessary to evaluate the various input entries sent.

    Great interest for the public consultation
    Anyway, first of all,  the Revenue Agency thank all those who have sent their comments on the measure, taking into account the technical complexity, the novelty of the subject and the specific nature of the sector concerned. Particularly, of the more than 40 contributions received, about half come from professionals and law firms with international activity, about a third from trade associations representing the operators and economic sectors most affected by the application of the tax, whilst the remaining observations come from the same operators potentially involved and from academics.

    The next steps
    The Agency has already begun to screen all the contributions received and will make available on the institutional website those for which consent to publication has been expressed. Finally, also in light of the numerous ideas received and with a view to ensure maximum certainty in the application of the new tax, the implementation measure will be followed by a circular which will provide clarifications on the more strictly interpretative aspects that have emerged.

    How the new DST works and on which subjects it applies
    First of all, the DST applies to revenues resulting from the provision of certain digital services obtained during a calendar year. The new taxable subjects substantially are businesses that, individually or in a group-wide entity, meet both of the following conditions in the calendar year before the one in which the taxable revenues are obtained: ● on a worldwide base, they have accounted a total revenues of not less than EUR750 million; ● they have obtained in Italy revenues of not less than EUR5.5 million from the digital services provided. Finally, the new DST will be calculated by applying the 3% rate to the amount of taxable revenues.

    A matter of law complexity
    The draft Director’s Decision clarifies several definitions and concepts included in the original legislation. The draft measure also includes further details about the compliance and accounting responsibilities of businesses subject to the digital services tax. In brief, the draft guidelines include the following contents: clarifications on the definition of taxable persons and taxable services; additional details of the place of taxation and user’s location; explanations of the tax calculation procedure; details of the registration process, the monthly accounting procedure, and the tax payment process, together with a description of the content and structure of the monthly ledger

    The new tax calendar rewritten
    Immediately after the closure of the public consultation, as already mentioned, the Agency published an a second Director Decision to postpone the calendar of the Italian digital tax, expressively in light of the numerous and useful comments received during the consultation. Therefore, the DST remains effective as of 1 January 2020, yet the first relevant deadlines will be 16 March 2021 for the tax payment and 30 April 2021 for the filing of the annual return related to fiscal year 2020. Particularly, payments due will be made via F24 form.

    Digital content and interface

    The regulatory perimeter for the first notion is defined by the Revenue guidelines as comprehensive of software, apps, games, music, video, text via download or streaming. As regards to the interface concept, it is fixed as any software, including websites or parts thereof and applications, also mobile, made available to users through which digital services are supplied. A digital interface can also be “multilateral,” when the users may upload and share digital content with other users, facilitating the supplies of goods/services among them.

    Stefano Latini

  • Italy’s Revenue Agency launch the online consultation on the Circular on the new Pir rules

    immagine generica illustrativa

    The Financial Administration has opened the public consultation on the contents of the Circular and on the clarifications contained therein on a series of innovative regulations introduced by the latest decrees to the discipline of multi-year individual savings plans, also known as Pir. Indeed, its draft text, will be available in consultation on the Revenue official-site,, until February 16th.

    Purpose of the initiative - The public consultation is aimed at acquiring by interested parties, private investors and financial operators, suggestions, insights and worthwhile contributions useful to read in view of the elaboration of the final draft of the text of the Circular.

    How the Pir work and the two investment variable – Basically, the multi-year individual savings plans, or Pir, are incentives for investments in the real economy. Or, put differently, fiscal measures aimed at encouraging investments in particular on non-listed companies. The last provision, come with the relaunch decree, has introduced a new type of “Individual Savings Plan” (‘Piani Individuali di Risparmio’ or ‘PIR’), involving more than 70% of the investment amount being made in companies rooted in Italy, other than those whose securities are traded in Borsa Italiana’s FTSE MIB and FTSE MID Cap indices or equivalent indices on other regulated markets. For these individual savings plans, the so-called “concentration constraint” stands at 20% instead of 10%. Another new feature of these instruments is the higher size limit for the investments made: € 300.000 per year and € 1.500,000 overall, instead of € 30.000 per year and € 150.000 overall as it was in the case of “ordinary” individual savings plans.

    The fiscal advantage - The Pir are not taxed as capital and other financial income and they are not subject to inheritance tax. Furthermore, in order to benefit from the ad hoc tax rilef, investments must be held for at least 5 years. However, the discipline has been the subject of several recent modifications introduced in the 2021 Budget Law, among these is a tax credit equal to any losses deriving from qualified investments made by December 31, 2021, provided that they are detained for at least five years. The tax credit in question can be used, in ten annual installments of the same amount, in tax returns starting from that relating to the tax period in which the negative components are considered realized or in compensation using the “F24” model.


    Stefano Latini