Austria to introduce 5-pct tax on large digital corporations

Source: Xinhua| 2019-04-04 02:08:37|Editor: Mu Xuequan
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VIENNA, April 3 (Xinhua) -- Austria plans to introduce a 5-percent digital tax on major digital corporations as part of a package to generate over 200 million euros of tax revenue, government leaders announced here on Wednesday.

Talking to the media earlier Wednesday morning, Austrian Chancellor Sebastian Kurz introduced the plans of a national digital tax as a positive contribution to the country's economy.

"We are a pioneer in the European Union and I expect many other member states to join us in taxing internet giants," said Kurz.

"It is a step towards a higher level of fairness but definitely not a measure against digital enterprises," said the Austrian Chancellor.

To bring more fairness into a system that still plays by rules and regulations set up before the digital transformations was also the key message of Vice-Chancellor Heinz-Christian Strache.

"The introduction of the Digital Tax is a good step into the right direction and marks the start of a process that has the goal of bringing more justice and fairness to the system," he said.

Austrian Finance Minister Hartwig Löger and State Secretary Hubert Fuchs sent on Wednesday the first part of their digital tax package for evaluation.

The package includes the introduction of a 5 percent digital tax on online advertising for companies achieving worldwide sales of 750 million euros, of which 25 million euros consists of digital advertising sales in Austria.

Major digital corporations currently pay on average just 0.8 percent of their turnover in corporation tax and 0 percent tax on their advertising revenues.

As a future measure, digital agency platforms are also to assume full liability for disclosure obligations, meaning from 2020 onwards, booking platforms will be required to notify all bookings and sales to the relevant authorities.

The package also comprises compulsory VAT for digital retail platforms.

Previously, parcel deliveries from third countries were exempt from VAT where the value of the goods totaled 22 euros or less.

"We are putting a stop to this circumvention opportunity. In future, all sales will be taxed from the very first cent," affirmed Fuchs.

"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," said Löger. (one euro currently equals to 1.12 U.S. dollars)