On December 2017, Italy passed a 3% tax on certain internet transactions concerning services through electronic means. The 3% tax will be calculated on the value of the transaction (VAT excluded), notwithstanding where the transaction is executed.

Services provided through electronic means include all those services provided through the internet or an electronic network and whose performance is basically automated – with minimal human intervention – and that would be impossible in the absence of information technology.

The tax will apply to transactions involving certain Italian residents as well as permanent establishments owned by foreign entities.

The exact scope of services subject to this tax is to be identified by the Italian Government by April 2018. The tax will be effective in 2019 and it is anticipated to generate annual revenues of around EUR 190 million.

The 2018 Budget law that contained this tax (Legge n. 205 del 27 dicembre 2017 – Bilancio di previsione dello Stato per l’anno finanziario 2018 e bilancio pluriennale per il triennio 2018-2020) was published on the Italian Official Journal dated December 29, 2017, and it is available at http://www.gazzettaufficiale.it…  See paragraph 1011 and the following (in Italian) for more information, or contact us to understand if your company will be affected by the new web tax.

Francesca Giannoni-Crystal & Federica Romanelli.