Digital Services Tax (DST) Explained: What Netflix, Google & Freelancers Need to Know

Digital Services Tax (DST) Explained

What Netflix, Google & Freelancers Need to Know

📱 What is Digital Services Tax?

Digital Services Tax (DST) is a tax on revenue from digital services provided in a country, even if the company isn't physically present there. It ensures tech giants pay taxes where they have users.

Applies to: Online ads, digital marketplaces, social media, streaming, and data services.

Key Point: DST is on revenue (usually 1-3%), not profit. Companies pay even if they're not profitable in that country.

🌍 Which Countries Have DST?

Many countries have DST laws targeting large digital companies:

🇪🇺 EU (Various proposals)

🇬🇧 UK (2% rate)

🇨🇦 Canada (Proposed 3%)

🇫🇷 France (3% rate)

🇮🇹 Italy (3% rate)

🇪🇸 Spain (3% rate)

Each country has different rules, rates, and thresholds.

🏢 Who Needs to Pay DST?

1. Large Digital Companies (Global revenue > €750M usually):

Google

Facebook/Meta

Amazon

Apple

Netflix

Airbnb

Uber

Spotify

2. Remote Service Providers & Freelancers: May need to pay if they meet local thresholds, especially through digital platforms.

Freelancers: Check local rules. Some countries tax smaller digital service providers too.

⚖️ DST vs VAT/GST: Key Differences

Feature	DST	VAT/GST
Tax Base	Revenue	Value added
Who Pays	Large digital companies	All businesses
Rate	1-3%	15-25%
Collection	Paid by provider	From consumer

Note: Companies may need to pay both DST and VAT/GST on the same services.

🚀 Future: OECD Global Minimum Tax

130+ countries agreed to a 15% global minimum corporate tax (OECD framework). This may replace national DST laws.

Two Pillars:

1. Tax multinationals where they operate
2. 15% global minimum tax rate

Outlook: DST may transition to global system, but timing is uncertain. Stay updated on tax changes.

For informational purposes only. Consult a tax professional for advice.

© Digital Services Tax Guide