Either use the drop-down list to choose a jurisdiction or use your mouse to hover and/or click on a jurisdiction.
It then provides current information on the direct tax treatment of digital services in that jurisdiction.
Argentina has enacted a digital services withholding tax at a 35% rate (8% when subject to VAT). It applies to foreign currency transactions for digital services.
This was enacted by Resolution No. 4815/2020.
Austria’s Digital Tax Act, 2020, has enacted a digital services tax at a 5% rate.
It applies to digital advertising services where an MNE has global revenue exceeding 750 million euros and revenue from digital advertising in Austria of more than 25 million euros.
Bangladesh has enacted a digital services withholding tax Under Section 56 of the Income Tax Ordinance, 1984. The rate varies from 7.5% to 30%. It applies to the sale of digital goods or services to consumers in Bangladesh.
Bill 2358/2020, includes a proposal to create the Contribution of Intervention in the Economic Domain on the gross revenue of digital services provided by large technology companies (Cide-Digital).
It applies to digital advertising activities, digital platforms and user data transmission where global revenue exceeds R$ 3 billion and R$ 100 million in Brazil.
Rates are:
1% on gross revenue up to R$ 150,000,000;
3% on gross revenue that exceeds R$ 150,000,000 up to R$ 300,000,000; and
5% on gross revenue that exceeds R$ 300,000,000.
Canada has proposed a 3% digital services tax for companies that have global revenue of over 750 million Canadian Dollars and revenue in Canada from digital services that exceeds 20 million Canadian dollars.
Digital services include online marketplace services revenue, online advertising services revenue, social media services revenue, and user data revenue.
Amendments to the 2022 Tax Reform Law, include proposals (later enacted in Article 57 of Law 2277 of 2022 on December 13, 2022) to deem there to be a significant economic presence in Colombia on the provision of certain digital services in Colombia.
This applies to:
A significant economic presence can also apply where a foreign company sells goods with a total amount exceeding approximately USD 259,000 per year to Colombian users.
Companies with a significant economic presence in Colombia will be subject to a 10% withholding tax unless they opt to file a domestic tax return (in which case they would be taxed at 3% on their gross Colombian income.
Title 6(3) of the Finance Act, 2020, extended the definition of domestic source royalties in Article 111A bis of the General Tax Code. As such, a 10% withholding tax applies on video streaming services paid to non-resident suppliers.
Côte d’Ivoire enacted a digital streaming tax at a 3% rate in Article 26 of the Finance Act, 2014 (as amended). It applies to revenue (ie no tax deductions) from the electronic provision of video streaming in Côte d’Ivoire.
The Czech Republic has proposed a digital services tax at a rate of 3% or 5%. It will apply to companies that have global revenue above 750 million euros and revenues from digital services in the Czech Republic of more than 100 million CZK.
There is an exemption for companies that do not generate more than 10% of their European revenue from digital services in the Czech Republic.
Services within the scope of the proposed DST include:
On August 15, 2022, the Danish Minister of Culture published a draft bill introducing a cultural levy on the turnover generated by Danish and EU-based digital streaming and on-demand platforms and services in Denmark.
The cultural levy will only apply to on-demand media service providers that have an annual turnover of more than 15 million Danish krone.
The levy is to be charged at 6% on the gross revenue from on-demand audio-visual media supply of films, fictional series, and documentary programs.
The Danish government states that the proposed cultural levy is not contrary to Pillar One of the OECD Two-Pillar Solution.
Law No. 2019-759 of 24 July 2019 provides for a digital services tax at a 3% rate.
It applies to gross revenues from
It only applies to companies that have global revenue of more than 750 million Euros and revenue from digital services in France of more than 25 million Euros.
Advertising Tax
Under Section 1(1)(e) of the Advertising Tax Law, Hungary applies an advertising tax to internet advertising that is predominantly in Hungarian or on a predominantly Hungarian language website. Under Section 5(1), the rate of Advertising Tax is 7.5% on sales revenues from advertising in Hungary that exceed HUF 100 million. However, under Article 5/A the rate has been reduced to 0% for the period December 31, 2019 to December 31, 2023 (extended from December 31, 2022 by Section 62 of Act XLV of 2022).
Retail Tax
Under Section 1(2)(e) of the Retail Tax Law, 2020, a Retail Tax applies to foreign residents that make retail sales in Hungary that are not subject to sales tax. Section 6 provides that the rate is
India applies a variety of measures to the provision of digital services by non-residents.
Equalisation Levy
There are two Equalisation Levies in India established under Finance Act, 2016 (as amended by Section 153 of Finance Act, 2020).
1. Section 165 of Finance Act, 2016 establishes a 6% equalisation levy on ‘specified services’ received by a non-resident from
providing the gross revenue equals or exceeds INR 100,000 annually.
Specified services are defined in Section 164 of Finance Act, 2016, as online advertising, any provision for digital advertising space or any other facility or service for the purpose of online advertising.
2. Section 165A of Finance Act 2016 established a 2% equalisation levy on revenue received by an e-commerce operator from e-commerce supplies made to a person resident in India or a person who buys e-commerce goods or services using an Indian IP address.
The 2% equalisation levy is not charged where the e-commerce provider has a personal establishment in India, if the 6% equalisation levy applies or if the revenue is less than INR 200,000 annually.
Under Section 164 of Finance Act, 2016, e-commerce supplies subject to the 2% equalisation levy include:
Significant Economic Presence
Under Section 9 of the Income Tax Act, 1961, a foreign entity with a significant economic presence is subject to corporate income tax. Section 5 of Finance Act 2020 expanded the definition to include income from advertisements that target Indian consumers, income from the sale of data collected from India and income from any related sale of goods or services.
Withholding Tax
Under Section 194-O of the Income Tax Act, 1961, a 1% withholding tax applies on the gross amount from the sale of goods or provision of services facilitated an electronic platform. There is an exemption on payments made to individuals where the gross amount does not exceed INR 0.5 million.
Significant Economic Presence
Regulation No. 1 of 2020 provides for foreign digital services providers to be subject to Indonesian corporate income tax if they have a significant economic presence in Indonesia. This will be based on gross global revenue, revenue in Indonesia and the number of active members in Indonesia. However, implementing regulations to give effect to this have not yet been issued.
Electronic Transaction Tax
Regulation No. 1 of 2020 also provides that if corporate income tax is not levied under the above significant economic presence test, an Electronic Transaction Tax can apply to the provision of digital goods and services. However, again implementing regulations have not yet been issued.
Under Circular No. 4/2016, foreign e-commerce providers are subject to Israeli corporate income tax if they have a significant digital presence in Israel. This is based on an analysis of the method of operating in Israel, including whether they carry on business in Israel mainly through the internet, the use of the Israeli language, selling to Israeli customers and using local currency.
Budget Law 2020 provides for a 3% digital services tax on gross revenue from:
The Digital Services Tax applies to resident and non-resident companies where they have global revenue of at least 750 million Euros and revenue from digital services supplied in Italy of at least 5.5 million Euros.
It has been reported that the Italian Treasury is considering increasing the DST rate to 6% in the 2023 Budget Law.
Kazakhstan has proposed an online payments tax on money transfers for the provision of digital goods and services. No rate has yet been provided.
Finance Act No. 15 of 2019 (as amended by Finance Act, 2021) expanded the scope of Kenyan tax to include income derived through a digital marketplace. Section 7 of Finance Act, 2022, excludes a non-resident with a permanent establishment in Kenya from the digital service tax.
The Income Tax (Digital Service Tax) Regulations, 2020, provide for a 1.5% digital services tax to apply to
Notification 0541, issued in February 2022 expands the scope of Laos taxation to include revenue from e-commerce and digital platform services which are subject to profit tax.
Under Section 109 of the Income Tax Act, a 10% withholding tax rate applies to Malaysian-source royalty income derived by a non-resident. Practice Note 1/2018 provides that the purchase or use of web applications to for online advertising is subject to the 10% tax as a royalty.
Other e-commerce services provided by non-residents can be subject to tax under the general income tax regime or subject to withholding tax under Section 109B of the Income Tax Act.
Under Article 113-A of the Income Tax Law, withholding tax applies to payments from marketplaces to Mexican individuals on income obtained through an online marketplace. The rates are:
Nepal’s 2022 Finance Act (issued in accordance with the 2022/2023 Budget) provides for a digital services tax levied at a rate of 2% on the gross revenue from digital services provided to consumers in Nepal. It is effective from July 17, 2022, and applies where a foreign service provider supplies digital services with revenue exceeding 2 million NPR.
Under Section 6 and Schedule 1 of the Income Tax Ordinance, 2001 (as amended by Section 53(A)(6) of the Finance Act, 2022), a 10% withholding tax applies for payments of offshore digital services. This includes online advertising, designing, creating, hosting or maintenance of websites, providing any facility or service for uploading, storing or distribution of digital content, online collection or processing of data related to users in Pakistan, any facility for online sale of goods or services, or any other online facility.
Article 9 of the Income Tax Law applies a 30% withholding tax to payments for digital services provided through the internet when the service is economically used or consumed in Peru.
Under Article 4-A of the Regulation to the Income Tax Law a digital service is any service that is made available to the user through the internet which is characterized as being essentially automatic and not viable in the absence of information technology.
The following are considered digital services (among others) under Article 4-A:
Tax on Streaming (Enacted)
Section 19(6a) of the Cinematography Act provides for a 1.5% tax on the gross revenue from streaming services in Poland. This is payable to the Polish Film Institute.
Digital Advertising Tax (Proposed)
A draft bill was proposed to levy a 5% annual tax on digital companies with global annual revenue of EUR 750 million or more that generate over EUR 5 million in online advertising revenue within Poland.
Digital Services Tax (Proposed)
A draft bill was issued that provides for a 7% digital services tax on foreign companies with a significant digital presence in Poland. This includes foreign companies that:
This includes:
Article 10 of Law n. 74/2020 provides for:
Section 9 of the 2021 Finance Act, introduced a 1.5% digital services tax on the gross revenue of resident taxpayers derived from digital transactions.
In addition, a 10.5% withholding tax applies to fees derived from providing digital services to a customer.
Under the draft Digital Services Tax Bill, a digital services tax is proposed on online advertising, online platforms and the sale of user data. However, no further details are yet available.
Law 4/2020, of October 15, on the Tax on Certain Digital Services, provides for a 3% on digital services including online advertising, online intermediation services, and the sale of user data generated through a digital interface. The DST applies to companies with global revenue exceeding EUR 750 million Euros and revenue from digital services in Spain exceeding 3 million Euros.
Effective January 1, 2023, the Foral Law 38/2022 provides for the same DST regime as above for supplies of digital services in the Autonomous Community of Navarra.
Under the Decree on Income Taxation of Cross-Border Electronic Services Provided by Foreign Enterprises, withholding tax applies to electronic services provided by foreign service providers. The rate varies. Electronic services include services accessed via the internet and other electronic tools including online platforms.
Section 70 of Finance Act, 2022, provides for a 2% digital service tax where a non-resident person receives a payment that has a source in Tanzania from an individual that relates to a digital marketplace.
In addition, Section 59 of the 2022 Finance Act, amends Section 3 of the Income Tax Act, to expand the scope of ‘business’ to include a transaction or activity carried out through the internet or an electronic means including an electronic service or transaction conducted in the digital marketplace. This will therefore bring most e-commerce activities within the scope of Tanzania’s income tax.
Thailand has proposed a 5% withholding tax on e-commerce goods and services.
Article 27 of Finance Law, 2020, provides for a 3% digital services tax on revenue from sales of computer software and services provided over the internet to residents by non-resident suppliers.
The Corporate Tax General Communique (as amended by Communique No. 17/2019) provides for a 15% withholding tax on payments for digital advertising services.
Law 7194/2019 provides for a 7.5% digital services tax on gross revenue from digital services. This has a wide scope and includes digital advertising, digital content, streaming and online games.
This applies to companies with global revenue of more than 750 million Euros and revenue from digital services in Turkey of at least 20 million Turkish Lira.
Part 2 of the Finance Act, 2020, provides for a 2% digital services tax which is levied on search engines, social media platforms and online marketplaces which derive revenue from UK users.
Only companies with global digital revenue of more than £500 million and with more than £25 million that is derived from UK users are subject to the digital services tax.
Maryland has enacted a digital advertising tax in House Bill 732, as amended by House Bill 787. It applies to advertising on a digital interface including banner ads, search engine ads and other similar advertising where global revenue exceeds 100 million USD and revenues from these activities in Maryland exceed 1 million USD. The rate varies between 2.5% and 10%.
An Anne Arundel County Circuit Court judge struck down Maryland’s tax on digital advertising on October 17, 2022 (Comcast v. Comptroller).
Decree No. 144/018 expands the scope of Uruguay source income to audiovisual services provided via the internet, from abroad to Uruguayan users. This is subject to the standard 12% withholding tax.
Circular No.103/2014/TT-BTC provides for a foreign contractor withholding tax regime. Under this regime, non-resident e-commerce businesses are subject to withholding tax at rates varying from 2% to 10%.
However, Decree 91/2022/ND-CP of October 30, 2022, provides that e-commerce platform owners providing goods or services to households are required to report on a quarterly basis information on the family business and individuals involved in the sale of goods or providing services on the e-commerce platforms.
Article 3 of Finance Act, 2019, provides that income of a foreign domiciled satellite broadcasting service or an electronic commerce platform in Zimbabwe is deemed to be Zimbabwean source income and is subject to tax at a 5% rate. This only applies if the digital revenue in Zimbabwe is more than 500,000 USD.
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