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Digital Service Taxes

Author

Listed:
  • Kane Borders
  • Sofía Balladares Herbert
  • Mona Barake
  • Enea Baselgia

Abstract

Digital Service Taxes (DSTs) are a recently introduced fiscal tool designed to tax digital companies. This note collects all publicly available data to take stock of the first few years of DST implementation. Currently, twelve countries – both OECD and non-OECD – have an active DST in place. Current tax revenues from these DSTs are mostly in line with expected revenues, comparable in magnitude to estimated Pillar 1 revenues, and rising rapidly. First experiences (e.g., from the UK) suggest that DSTs can be effective at taxing digital companies that have tended to pay low corporate income tax rates in destination countries in a targeted way. However, the available data remains limited and more research needs to be done to progress towards a full cost-benefit analysis of DSTs.

Suggested Citation

  • Kane Borders & Sofía Balladares Herbert & Mona Barake & Enea Baselgia, 2023. "Digital Service Taxes," Notes 006, EU Tax Observatory.
    • Handle: RePEc:dbp:plnote:006
    as

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    File URL: https://www.taxobservatory.eu//www-site/uploads/2023/06/EUTO_Digital-Service-Taxes_June2023.pdf
    File Function: Full note
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    References listed on IDEAS

    as
    1. Mona Barake & Elvin Le Pouhaër, 2023. "Tax Revenue from Pillar One Amount A: Country-by-Country Estimates," Working Papers halshs-04039288, HAL.
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    1. Mona Barake & Elvin Pouhaër, 2025. "Tax revenue from Pillar One Amount A: country-by-country estimates," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 32(3), pages 680-740, June.
    2. Kane Borders & Sofía Balladares & Mona Barake & Enea Baselgia, 2023. "Digital Service Taxes," Post-Print halshs-04174657, HAL.

    More about this item

    Keywords

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    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • F38 - International Economics - - International Finance - - - International Financial Policy: Financial Transactions Tax; Capital Controls

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