On 17 September 2026, Italian Prime Minister Giorgia Meloni announced the government’s decision to abolish the 3% digital services tax (DST) on large tech companies, effective 1 January 2027. The move aligns with the OECD Pillar Two global minimum tax agreement and aims to avoid transatlantic trade tensions. Italy had collected approximately EUR 400 million annually from the DST since 2020.
Key Takeaways
- DST Repeal: The abolition removes a unilateral measure that targeted revenues of digital giants like Google, Meta, and Amazon, replacing reliance on the multilateral Pillar Two framework.
- Revenue Replacement: Italy expects Pillar Two top-up taxes to compensate for DST revenue loss, though timing and amounts remain uncertain.
- EU Coordination: The decision pressures other EU members with DSTs (France, Spain, Austria) to follow suit, advancing the EU’s digital tax harmonization agenda.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement