Austria proposes to impose a five percent digital tax to close tax loopholes and ensure that large digital corporations are called to account.
Austria is seeking to impose a five percent digital tax on large digital corporations from 2020.
According to a digital tax reform package prepared by the Austrian Finance Ministry, a digital tax of five percent will be introduced on online advertising revenue in relation to companies with global sales of EUR750m, of which EUR25m originate from digital advertising sales in Austria.
EUR15m of this revenue will be used for the digital transformation process of Austrian media companies, the Finance Ministry noted.
Austrian Finance Minister Hartwig Löger said: “Through the digital tax package, we are closing tax loopholes and thereby ensuring that large digital corporations, agency platforms and retail platforms are called to account. Through fair taxation of the digital economy, we are establishing equity in taxation.”
“Both Austrian and traditional media face enormous challenges as a result of the market power of large digital corporations, and this cannot be overcome by solely using commercial business models. In order to strengthen Austria as a media location and to secure the country’s identity for the future, a digitalization fund will be set up. We will use this to support the digital transformation process of Austrian media companies,” Löger added.
The author is Alex Hunter, Editor, TP News. He oversees and updates the publication and also regularly writes news stories about transfer pricing and international tax law. Alex is reachable at editor@transferpricingnews.com