Digital Services Taxes and WTO Law: The Likeness Challenge in the Data Economy

This study explores the alignment of digital services taxes (DSTs) with the non-discrimination provisions outlined in the General Agreement on Trade in Services (GATS) with particular attention being paid to the concept of ‘likeness’. It focuses on the Italian DST as a representative case and examines whether this measure differentiates between ‘like’ digital services and suppliers in accordance with Articles II (Most-Favoured Nation (MFN)) and XVII (National Treatment (NT)). The analysis employs a doctrinal approach and integrates a comprehensive examination of World Trade Organization (WTO) law with relevant case law and tax scholarship. This reveals that revenue thresholds and carve-outs introduce structural asymmetries in the competitive relationship between services and suppliers that may be regarded as ‘like’ under WTO criteria. The Italian DST is ostensibly neutral but disproportionately impacts large multinational platforms thereby posing a significant risk of de facto discrimination under current jurisprudence. This study expands on this insight and argues that a model DST law crafted in accordance with the GATS principles is essential to ensure that future digital taxation initiatives fulfil their fiscal objectives without violating multilateral trade regulations.