Large businesses should consider how they may be affected by recent revised draft legislative proposals for the new 3% digital services tax (DST). These revised proposals, which were released on August 4, 2023, introduce a new election that businesses can make to simplify their calculations of digital services revenues for the 2022 and 2023 calendar years, clarify how affected businesses can determine their amounts of in-scope revenue and introduce measures that apply to partnerships, among other changes and clarifications. Finance notes that it will accept comments on these draft legislative proposals until September 8, 2023.

This publication provides an overview of some of the changes to the revised proposals. In light of these changes, businesses should determine how they may be affected by the revised DST rules. As a reminder, starting January 1, 2024, large businesses may be subject to the new DST on certain online revenues earned effective January 1, 2022, if the OECD’s Pillar One approach to international tax reform has not yet come into force.

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