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Italy’s digital services tax became effective January 1, 2020, with a sunset clause linked to the outcomes of the OECD’s Pillars. Businesses that earn Italian digital revenues above certain thresholds are subject to the tax, and a traditional ‘nexus’ is not required. For FY 2020, the 3% tax must be paid by February 16, 2021 and a specific tax return must be filed by March 31, 2021.

Par. 46 of art. 1 of Law 145/2018 grants the Italian Revenue Agency the power to issue an executive regulation that is not required for a law’s entry into force (or effectiveness), but which helps determine the scope of the tax’s application.

The Italian Revenue Agency published a draft executive regulation on December 16, 2020 and opened a public consultation (see the Italian Revenue Agency’s website) with a December 31, 2020 deadline to provide written comments.