Digital Services Tax Countries: Rates, Scope, and Thresholds

More than two dozen countries currently impose a digital services tax, with rates ranging from 1.5% to 7.5% of gross revenue. These taxes target large technology companies that earn significant income within a country’s borders without maintaining a physical office there. Instead of taxing net profit, most digital services tax countries apply the levy to gross revenue from online advertising, marketplace transactions, and user data sales. Below is where the tax is active, where it has been rolled back, and what it actually covers.

European Countries with an Active Digital Services Tax

France was the first major economy to formalize the approach, enacting Law No. 2019-759 in July 2019. It imposes a 3% levy on gross revenue from digital interface services and targeted advertising provided in France, applied to companies exceeding €750 million in global revenue and €25 million in French digital revenue during the prior year.¹

The United Kingdom followed in April 2020 with a 2% tax on revenues earned by search engines, social media platforms, and online marketplaces. Its thresholds are £500 million in worldwide revenue from in-scope digital activities and £25 million attributable to UK users.² A government review confirmed the tax remains in effect as an interim measure until an international agreement replaces it.³

Italy and Spain both apply 3%. Italy’s version, established in its 2020 Budget Law, covers targeted advertising, digital interfaces that connect users, and the transmission of user data.⁴ Spain codified its 3% rate in Law 4/2020, using thresholds of €750 million in global revenue and just €3 million in Spanish revenue, a much lower domestic bar than most peers.⁵

Austria takes a narrower approach, taxing only online advertising revenue at 5%. Its thresholds mirror France’s: €750 million worldwide and €25 million from advertising services provided in Austria.⁶

Turkey imposes one of the steepest rates at 7.5%, covering advertising, digital content sales, and platform-based intermediary services. Thresholds are €750 million globally and 20 million Turkish lira domestically. The Turkish president has authority to adjust the rate between 1% and 15% without legislative action.⁷

Several other European countries maintain smaller-scale levies. Poland charges 1.5% on streaming media and audiovisual services; a broader proposal for a general digital services tax at up to 3% was announced in early 2026 and remains under legislative consideration. Portugal applies 1.5% to video-sharing platforms and 1% to subscription television streaming. Denmark introduced a 2% levy on streaming video in 2024.

Countries Outside Europe with an Active Tax

India introduced the Equalization Levy in 2016 at 6% on payments for online advertising services provided by non-resident companies. The Finance Act 2020 expanded the levy to include a 2% charge on broader e-commerce transactions, but the government discontinued that expansion effective August 1, 2024. The original 6% rate on advertising services remains in effect.⁸

Kenya originally imposed a 1.5% digital services tax on gross transaction values through its Finance Act 2020.⁹ In late 2024 it replaced that levy with a Significant Economic Presence tax at 3% on non-residents earning from digital marketplaces. Nigeria uses a similar approach under its Companies Income Tax Act, taxing non-resident digital companies once their Nigerian gross turnover exceeds 25 million naira from activities like streaming, data transmission, and marketplace intermediation.

Other countries with active digital levies include Pakistan (2%), Nepal (2%), Tanzania (2%), Uganda (5%), Zimbabwe (5%), Tunisia (3% on non-resident digital services), Colombia (3% under a Significant Economic Presence test), Paraguay (4.5% on non-resident digital services), and Uruguay (12% on non-resident digital services). Each defines its own scope and thresholds.

Countries That Repealed or Suspended Their Tax

Canada is the most prominent reversal. After enacting the Digital Services Tax Act in 2024 with retroactive application, the government repealed the law entirely through Bill C-15 (Budget 2025 Implementation Act), which received Royal Assent on March 26, 2026. The repeal was retroactive to June 20, 2024, and the Canada Revenue Agency must refund all collected payments with interest. Federal fiscal projections for 2025–2026 estimate DST revenue at zero.

Hungary formally has a 7.5% advertising tax on the books, but the effective rate has been 0% since 2019. The government continues to maintain this suspension through emergency decree, and as of mid-2026 the 0% rate remains in force. No company pays Hungary’s advertising tax in practice.

India’s 2% e-commerce equalization levy expired in August 2024, though the original 6% advertising levy continues. Brazil proposed a 7% “digital social contribution” on revenue from digital advertising and data sales in mid-2025, but the bill requires full congressional approval and has not been enacted.

What Activities Get Taxed

Three categories of digital activity appear in nearly every country’s version of the tax, though the exact scope varies.

Targeted advertising: revenue from placing ads that rely on data collected about users, including sales of ad space on search engines and social media platforms. The logic is that user engagement and data are what make the placement valuable, so the country where users are located claims a share.
Digital marketplaces: fees and commissions earned by platforms that connect buyers and sellers without owning the goods, covering ride-sharing apps, accommodation booking, and general retail marketplaces. The taxable amount is the platform’s revenue from facilitating the transaction, not the underlying sale price.
User data sales: revenue from monetizing information about users’ habits, search history, or demographic profiles. Countries treat this data as a valuable asset extracted from the local population.

Some countries go further. Turkey also taxes the sale of digital content such as apps, music, video, and in-game purchases.⁷ Austria takes the opposite approach, narrowing its scope to online advertising only.⁶ A company that owes nothing in Austria might face significant liability in Turkey for identical business activities.

Revenue Thresholds That Decide Who Pays

Nearly every digital services tax uses a two-tier threshold to limit its reach to the largest multinationals. The first tier is a global revenue floor; the second is a minimum amount of in-country digital revenue. A company must exceed both before any tax liability arises.

The global threshold is consistent: France, Spain, Italy, Austria, and Turkey each set it at €750 million in worldwide revenue. The UK uses its own equivalent at £500 million.² These figures keep small and mid-size companies outside the net.

The domestic threshold varies more. France and Austria both require €25 million in local digital revenue.¹ The UK sets its floor at £25 million.¹⁰ Spain’s domestic threshold is far lower at just €3 million, which pulls more companies over the line.⁵ Turkey’s domestic floor is 20 million Turkish lira.⁷

Thresholds are calculated from the prior fiscal year’s gross receipts, excluding value-added tax and other indirect taxes. Companies falling just below the line still need solid records to prove exempt status if audited.

Why the Map Keeps Changing

Two forces keep shifting which countries actually tax digital services. The first is the OECD/G20 Inclusive Framework’s work on Pillar One, a Multilateral Convention that would reallocate taxing rights to countries where customers are located and require participating nations to remove their existing digital services taxes.¹¹ Pillar One’s scope is far narrower than most national DSTs, applying only to multinationals with revenue above €20 billion and profitability above 10%, roughly 100 companies worldwide.¹² The Convention text was approved by the Inclusive Framework’s task force in October 2023 but has not opened for signature as of early 2026. Countries that initially paused their tax plans have been reconsidering.

The second force is US trade pressure. The Office of the US Trade Representative launched Section 301 investigations into the digital services taxes of France, Austria, Italy, Spain, Turkey, India, and the United Kingdom, concluding that the taxes disproportionately targeted large US-headquartered firms.¹³ Retaliatory tariff actions announced in mid-2021 were suspended and then terminated by late November 2021 to give OECD negotiations room, with a “further monitoring” caveat preserving the option to reimpose them. With Pillar One stalled, that threat remains live and will keep shaping which taxes get enforced, expanded, or quietly shelved.

1
Office of the United States Trade Representative. Report on France’s Digital Services Tax
2
HM Treasury. Digital Services Tax Review
3
GOV.UK. Digital Services Tax Review Report
4
Ministère de l’Économie, des Finances et de la Souveraineté industrielle et numérique. Taxe sur les Services Numériques
5
Official State Gazette (Agencia Tributaria). Law 4/2020, Tax on Certain Digital Services
6
Federal Ministry of Finance. Digital Tax Act 2020
7
Office of the United States Trade Representative. Report on Turkey’s Digital Services Tax
8
Income Tax Department. Equalisation Levy
9
Kenya Revenue Authority. Digital Service Tax Brochure
10
UK Parliament. The Digital Services Tax – Committee of Public Accounts
11
OECD. Multilateral Convention to Implement Amount A of Pillar One
12
OECD. Pillar One Amount A Fact Sheet
13
Office of the United States Trade Representative. Section 301 – Digital Services Taxes