Austria Officially Introduces Digital Tax In Its Tax Reform Plans

; posted on
January 18th, 2019

The Austrian Government has issued a release on its tax reform plans, including measures for the taxation of the digital economy, which include a 3% tax on revenue from online advertising and reporting obligations for online intermediary platforms.

Background

As the EU has not yet agreed on an approach for the Member States, the Austrian Government, a coalition of Conservatives and the Freedom Party, now wants to introduce a country-specific digital tax. The digital tax aims to implement fair taxation of the digital economy. New levies on Internet advertising, online retailers and sharing platforms would potentially add up to about €200m of additional tax revenue.

The Digital Tax Measures

The government laid out the following three measures to tax the digital economy in its tax reform plans:

  • Digital corporate tax on online advertising: a 3% tax on Internet advertising revenue for all groups with worldwide revenues of at least €750m and Austrian revenues of at least €10m. This measure aims to levy taxes on international groups that currently pay minimal taxes in Austria according to the Austrian Government.
  • Effective regulations regarding online trading from third countries: until now, VAT has only been payable on packages from third countries if the value of the goods exceeded 22 Euros. However, many packages arriving in Austria (mainly from China) have false declarations attached to avoid payment of VAT. To protect Austrian traders, in future VAT will arise from the first cent.
  • Taxation and more stringent reporting requirements for online intermediary platforms i.e. tourism. Operators would be obliged to report certain information to the tax authorities, which is relevant to levy taxes. In addition, operators could be held liable to enforce reporting obligations.

In addition to measures for the digital economy, the tax reform plans to reduce the VAT rate to 10% on electronic publications in line with traditional publications and providing tax relief for individuals and SMEs from 2020.

The Austrian Ministry of Finance will publish further details of the planned measures in due time.

Sources: Austrian Government (Press Release, Austrian Ministry of Finance

 

 

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