Week in Insights: Italy’s DST Dilemma Shows Global Policy Matters

Italy’s digital services tax is a contentious issue with trade partners, including the US. Washington has accused Rome of obliquely targeting US tech companies such as Alphabet Inc., Amazon.com Inc., and Meta Platforms Inc. through arbitrary revenue thresholds.

Introduced in 2019, the Italian DST imposed a 3% tax on digital revenue generated by companies exceeding 750 million euros ($794 million) in revenue globally. This included many US companies, which opponents of the tax suggested were unduly burdened. The Italian government had framed the policy as a neutral, revenue-generating measure, but the tax prompted threats of retaliatory tariffs ...