Tax News Daily
The latest tax news from around the world, summarised and tagged for tax professionals. Updated twice daily.
Tax Head
Region
Chile – Foreign Online Betting Platforms Mandated to Register for Digital VAT
Chile has mandated that foreign online betting platforms must register for digital VAT obligations, expanding the country's existing digital services tax framework. The requirement targets overseas operators offering online gambling and betting services to Chilean consumers, bringing them in line with domestic providers. Platforms will need to comply with registration procedures ahead of the 2026 implementation deadline. This move reflects Chile's broader effort to capture VAT revenue from cross-border digital services, following earlier measures applied to streaming, software, and other digital products. Tax professionals advising foreign gaming operators should assess registration thresholds, compliance timelines, and invoicing requirements under Chilean tax authority (SII) regulations.
Italy: Court rules DST not applicable to direct online sales
An Italian court has ruled that Italy's Digital Services Tax (DST) does not apply to direct online sales transactions. The decision clarifies the scope of Italy's DST, which targets revenues from digital intermediation services and advertising rather than straightforward e-commerce sales where a company directly sells goods or services to consumers online. This ruling has significant implications for multinational businesses operating direct-to-consumer digital sales models in Italy, potentially excluding a broad category of online revenue from DST liability. Tax professionals advising clients with Italian digital operations should review their DST exposure in light of this judicial interpretation of the tax's applicability.
Multistate Tax Trends: SALT Litigator Jennifer Karpchuk on Market-Based Sourcing Frictions, Digital Ad Taxes, and Multi-Jurisdictional Audit Risks
Tax litigator Jennifer Karpchuk discusses key state and local tax (SALT) trends affecting multistate businesses in the US. The interview covers market-based sourcing frictions, where inconsistent state rules create compliance complexity for service companies determining revenue attribution. Digital advertising taxes—following Maryland's contested levy—remain a significant concern as states explore similar measures. Multi-jurisdictional audit risks are escalating as states coordinate enforcement and expand nexus assertions post-Wayfair. Karpchuk highlights the litigation landscape around these issues, offering insights into dispute resolution strategies, the importance of proactive compliance planning, and how businesses can manage exposure across differing state tax regimes.
Are AI Services Causing States to Re-think How They Apply Sales Tax?
The proliferation of AI services is prompting U.S. states to reconsider their sales tax frameworks, which were largely designed for tangible goods and traditional software. As AI-driven products blur the lines between software-as-a-service, data processing, and information services, states face classification challenges that determine taxability. Some states are issuing guidance or revisiting existing rules to address whether AI outputs constitute taxable digital goods or exempt services. Tax professionals must monitor state-by-state developments closely, as inconsistent treatment creates compliance complexity. Companies offering or purchasing AI services should conduct nexus and taxability analyses to assess exposure under evolving state sales and use tax regimes.
CCIA Supports Bipartisan Resolution Opposing Discriminatory Digital Services Taxes
The Computer & Communications Industry Association (CCIA) has expressed support for a bipartisan congressional resolution opposing discriminatory Digital Services Taxes (DSTs). The resolution targets DSTs imposed by foreign governments that disproportionately burden US technology companies. CCIA argues these taxes are discriminatory, violate international trade norms, and undermine efforts toward a coordinated global tax framework. The association contends that unilateral DSTs create double taxation risks and trade friction, particularly affecting American digital firms operating abroad. This legislative move aligns with broader US government pressure on countries maintaining DSTs, including ongoing trade negotiations and potential retaliatory tariff considerations.
Azerbaijan – VAT Compliance for Non-Resident Digital Service Providers 2026
Azerbaijan is implementing updated VAT compliance requirements for non-resident digital service providers effective 2026. Foreign businesses supplying digital services to Azerbaijani consumers will be subject to VAT registration and reporting obligations, requiring them to account for VAT on B2C digital transactions. The regime follows the increasingly common 'Netflix tax' model adopted globally, where non-resident providers must register with Azerbaijani tax authorities, charge VAT at the applicable rate, file periodic returns, and remit collected tax. Tax professionals advising multinational digital service companies should review their clients' exposure to Azerbaijan's marketplace and assess registration thresholds, filing frequencies, and invoicing requirements under the updated framework.
Philippines – Petition to Abolish VAT on Digital Books and Digital Content
A petition has been filed in the Philippines seeking to abolish VAT on digital books and digital content, targeting reforms potentially taking effect in 2026. The initiative reflects growing advocacy to treat digital reading materials and content on par with traditional printed books, which typically enjoy VAT exemptions in many jurisdictions. The petition highlights concerns that VAT on digital content creates an inequitable tax burden on consumers and hinders access to education and information. Tax professionals should monitor legislative developments as the Philippines continues to refine its VAT framework for digital goods and services following earlier e-marketplace VAT reforms.
Illinois’ New Social Media Tax Is a Shambles
Illinois has enacted a new tax targeting social media companies, but the legislation has drawn significant criticism for its poorly drafted provisions and structural flaws. The Tax Foundation analysis highlights that the tax is riddled with ambiguities, implementation challenges, and potential constitutional issues. The measure appears to target large digital platforms operating in Illinois, raising concerns about its administrability, legal defensibility, and economic consequences. Critics argue the tax is hastily constructed, creating uncertainty for businesses and tax administrators alike. The article examines specific drafting deficiencies that could undermine enforcement and compliance, suggesting the legislation may face legal challenges and practical difficulties in collection.
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