Austria introduces a special tax for Internet giants

Австрия вводит специальный налог для интернет-гигантов

Austria imposes a tax in the amount of 5% of the profits from advertising for major digital corporations such as Facebook, Google or Amazon. The corresponding decision was taken at a government meeting Wednesday, UKRINFORM reported.

“We are the first in the European Union, and I expect many other members will join us in the taxation of the Internet giants. This is a step towards a better level of fairness and, of course, is not directed against digital companies – we see them a very positive contributor to our economy,” said Federal Chancellor of Austria Sebastian Kurz.

Vice-Chancellor Heinz-Christian strache said that the new set of digital tax aims to bring more fairness into a system that is still based on the rules that were created before the digital transformation.

The package provides three main innovations which will be effective from 2020.

First, enter the advertising charge 5% for major Internet companies, whose annual turnover is more than EUR 750 million, of which EUR 25 million in Austria. First of all, this step will affect companies like Facebook and Google.

In addition, there are obligations on online platforms of short-term rentals, such as Airbnb, who will inform the relevant authorities on all reservations and transactions and be responsible for implementing tax-free transactions homeowners.

Another innovation – the compulsory VAT for digital platforms retail trade. Previously parcels from third countries to Austria were exempt from VAT if the total value of the goods does not exceed 22 euros – now all sales will be taxed. According to Austrian media, operating earlier rules have made possible the machinations of the parcels from China that were purchased through platforms such as, for example, Amazon.

The Austrian government expects that the new set of digital tax will provide revenues to the budget annually about 200 million euros.