On 5 August 2022, the Irish Revenue Commissioners
("Revenue") issued guidance in Revenue
e-Brief 158/22 (the "Guidance") in
respect of the deductibility of certain Digital Services Taxes
("DSTs").
Expansion of DST Guidance
The Guidance outlined Revenue's position that DSTs are a
turnover tax, which are levied on revenues, rather than profits, in
relation to the provision of digital services and advertising. This
is noteworthy as if DSTs were considered a "tax on
profits", a deduction would not be available under existing
restrictions contained in the Irish legislation (section 81(2)(p)
of the Taxes Consolidation Act 1997). In its recently published
Guidance, Revenue have confirmed that certain types of DSTs which
are incurred wholly and exclusively for the purposes of a trade are
deductible in respect of computing income of that trade with
respect to Irish corporation tax.
