Digital services tax (DST) tracking

Description

Digital services tax tracking is the revenue-side compliance function that emerged when the UK, France, Italy, Spain, Austria, Turkey, Canada, and India each decided, on independent timelines, that the existing corporate-tax framework did not capture enough of the revenue digital businesses earned inside their borders. The OECD Pillar One process was supposed to consolidate these into a single multilateral mechanism. As of 2026 that process has not displaced any of the national DSTs, and several jurisdictions have signaled they will keep their DSTs running until Pillar One is actually in force rather than agreed in principle. The operator-side consequence is that revenue earned from in-scope digital services may be taxable in seven or eight countries simultaneously under seven or eight different statutes, each with its own definition of what counts. A working tracking program decomposes into three layers. The first is revenue categorization, which maps the operator's accounting categories (advertising, marketplace fees, SaaS subscriptions, in-app purchases) to each DST's scope definition; the mapping is usually a tax-counsel call rather than a bookkeeping one because the definitions diverge in load-bearing ways (the UK DST scopes social-media platforms, search engines, and online marketplaces; France's scope is closer to advertising plus intermediation; Austria's tax is advertising-only at 5 percent). The second layer is threshold monitoring, which flags when in-country revenue is approaching the registration trigger; the lookback rules in most DST statutes make detection close to the threshold materially more expensive than detection well above it. The third layer is filing and remittance per jurisdiction, with the cadences ranging from monthly (Austria, Turkey) to quarterly (France, Spain) to annual (UK, Canada). The headline numbers anchor the budget conversation. UK DST is 2 percent of UK-derived revenue once global group revenue exceeds £500M and UK group revenue exceeds £25M, with a £25M annual UK allowance applied before the rate bites. France is 3 percent on France-derived revenue above €750M global plus €25M French. Italy is 3 percent above €750M global plus €5.5M Italian. Spain is 3 percent above €750M global plus €3M Spanish. Austria is 5 percent on Austrian-derived online advertising revenue above €750M global plus €25M Austrian. Turkey is 7.5 percent on Türkiye-derived digital services revenue above €750M global plus TRY 20M national. Canada is 3 percent on Canadian-source revenue above €750M / CAD 1.1B global plus CAD 20M Canadian, with the 2024 statute reaching back to 2022 revenue. India's equalisation levy is a separate construct at 2 percent on non-resident e-commerce operators with annual receipts above INR 20M, and applies whether or not the DST thresholds are met. DSTs are typically not creditable against home-country corporate income tax. The cost is genuinely additional rather than offset, and the budget impact tends to be larger than first-pass tax-planner estimates assume because the additivity stacks across jurisdictions on the same revenue dollar.

Applicability

Applies when: markets include UK, EU, france, india, or turkey.

How predicates are evaluated

Required by (7 regulations)

• UK DST

  Finance Act 2020 Sections 39, 41, 47 + Schedule 8 — 2% UK DST on UK-derived digital services revenue; £500M global + £25M UK group-consolidated thresholds; £25M annual UK allowance.

  Finance Act 2020 Sections 39, 41, 47 + Schedule 8

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• France DST

  Loi n° 2019-759 — 3% France DST on France-derived digital services revenue; €750M global + €25M French group-consolidated thresholds; quarterly advance payments + annual return.

  Loi n° 2019-759

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• Italy DST

  Legge 160/2019 art. 1 commi 35-50 — 3% Italy DST on Italian digital services revenue; €750M global + €5.5M Italian group-consolidated thresholds.

  Legge 160/2019 art. 1 commi 35-50

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• Spain DST

  Ley 4/2020 IDSD — 3% Spain DST on Spanish digital services revenue; €750M global + €3M Spanish group-consolidated thresholds; quarterly return cadence.

  Ley 4/2020 IDSD

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• Austria DST

  Digitalsteuergesetz 2020 — 5% Austria Digital Advertising Tax on Austrian-derived online advertising revenue; €750M global + €25M Austrian group-consolidated thresholds; monthly return cadence.

  Digitalsteuergesetz 2020

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• Türkiye DST

  Law No. 7194 (Türkiye) — 7.5% Türkiye DST on Türkiye-derived digital services revenue; group-consolidated thresholds (€750M global + TRY 20M national); monthly return cadence via Türkiye Revenue Administration.

  Law No. 7194 (Türkiye)

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• Canada DST

  Canada DST is REPEALED. Operators that previously registered should follow CRA refund guidance. No tracking obligation under Canadian DST going forward. Historical reference only.

  Canada Digital Services Tax Act (REPEALED 2025-06-29). Federal budget bill royal assent 2025-03-26 repealed the DST; collection halted; CRA refunded ~CAD $647M to taxpayers. No future Canadian DST obligations under this regime.

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Fulfilled by (2)

• avalara · partial · medium effort · $$$
• In-house build · medium effort

Magist does not accept payment from vendors. Methodology.

Evidence formats

• DST revenue ledger
• DST returns