The finance minister announced the new measure, largely modelled on the French one.
Background: The reform of the taxation system for digital industries has been a hot topic in recent months. OECD countries are engaged in changing the principles of taxation to ensure businesses can be taxed even when they are not based in the countries where they generate their profits. In Europe, the EC proposed a European digital tax in 2018; however, disagreements between countries brought the initiative to a standstill.
What does the tax look like? Today, the Austrian government unveiled its plan, which largely resembles the proposal currently under discussion in France. The government aims to introduce a digital tax of 5% for ‘large digital corporations’. This will apply to online advertising revenues from companies generating global sales of €750m, with at least €25m coming from Austria. On top of that, a compulsory VAT for digital retail platforms will be introduced; previously, parcel deliveries from third countries were exempt from VAT for values of less than €22. Platforms will also have reporting obligations, in order to tackle risks of tax avoidance.
Next steps: The proposal is still at the ‘evaluation’ stage, and could undergo amendments during the legislative process. The government aims to make it valid from 2020, and pledged to use €15m to help the digital transformation process of Austrian media companies through a digitalisation fund.
