Irish Revenue has issued eBrief No. 158/22 on a new Tax and Duty Manual Part 04-06-03, which provides guidance on the tax deductibility of Digital Services Taxes (DSTs). This includes that Revenue is prepared to accept specified DSTs as a deductible expense if incurred wholly and exclusively for the purpose of a trade.
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Executive Summary
The purpose of this manual is to outline the rules in relation to the tax deductibility of Digital Services Taxes.
1 The General Rule
Tax under Case I and Case II of Schedule D is charged without any deduction other than a deduction authorised by the Tax Acts. Section 81 allows for deductions in respect of expenses incurred wholly and exclusively for the purposes of a trade.
2 Digital Services Taxes
Digital Services Taxes (DSTs) are levied in a number of jurisdictions. They are charges typically levied on revenues associated with the provision of digital services and advertising.
Where the following DSTs have been incurred wholly and exclusively for the purposes of a trade, Revenue is prepared to accept that they are deductible expenses in computing income of that trade:
- France's Digital Services Tax
- Italy's Digital Services Tax
- Turkey's Digital Services Tax
- United Kingdom's Digital Services Tax
- India's Equalisation Levy
Queries in relation to DSTs levied in other jurisdictions should be made in writing via My Enquiries to the RTS Query Management Team (QMT) as contained in Appendix B of the Revenue Technical Service Tax and Duty Manual (37-00-00A). The list of DSTs above may be updated as required.