Austria to implement digital tax on big tech firms

Austrian chancellor, Sebastian Kurz, announced on Saturday the country plans to follow France by imposing a digital tax on large tech companies such as Google, Amazon, Apple, and Facebook, according to a phys.org report.

Kurz’ proposal, which comes after the European Union failed to finalise a new EU-wide levy, is set to come into effect by 2020.

Digital tax

“It is only fair that Internet giants in Europe pay a proper amount of tax,” Kurz said, according to a statement. “In addition to a EU-wide move, we’ll also act on a national level. We will introduce a digital tax in Austria.”

Kurtz said that EU member states “agree in principle that there is a need for such a tax.”

He said finance minister, Hartwig Loeger, is in the middle of  “working out the details and their implementation and will unveil the basic framework at the beginning of January”.

The European Commission has revealed that the companies are paying less than half the tax that traditional companies pay. The European Commission estimates that multinational tech companies pay roughly 9% on average, compared to the 23% that traditional companies pay.

“The aim is clear – to tax companies that generate huge profits online, but pay hardly any tax on them, such as Facebook or Amazon,” Kurz said.

France tech tax

France will begin taxing tech companies like Google, Apple, Amazon, and Facebook from January 1st.

The French finance minister, Bruno Le Maire, said earlier last month, that he hopes the tax would help raise €500m (£450m) in 2019.

France had proposed a comprehensive digital service tax (DST) to cover all 28 member states, which needs the unanimous approval of 28 member states before it could be introduced. 

However, a number of EU countries, including Ireland, Sweden, Denmark, opposed its introduction.

Ireland, which hosts large tech companies like Google, Amazon, Apple, and Facebook, argued that the move would exacerbate the trade tensions between the US and European countries.

 

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