Daily Tax Report: International

Austrian Digital Tax Plans to Be Finalized in Government Meeting

April 3, 2019, 8:08 AM

Austria’s government will finalize plans to raise more than 200 million euros ($224 million) in taxes from Internet businesses in its meeting April 3, the chancellery said in an emailed statement.

The move comes after Austria failed to convince the other European Union members last year to agree on a joint plan that ensures Internet giants can’t avoid national taxes. The estimated revenue the measure will generate is equivalent to 0.2 percent of Austria’s total 2018 tax income.

“We’re making a first important step to increase the contribution of digital giants to the tax revenue,” Finance Minister Hartwig Loeger said in the statement.

The three-pronged tax package, first flagged in January, includes:

  • A 5 percent tax on advertising sales that targets companies such as Alphabet’s Google or Facebook.
  • A requirement for online platforms such as Airbnb to report to Austrian tax authorities the transactions they arrange, and be liable if landlords don’t tax their rental income.
  • Two thirds of the foreseeable revenue expected to come from online retailers from non-EU countries such as Alibaba Group Holding; they will have to pay value-added tax for low-value goods as an exemption for orders below 22 euros is phased out.

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To contact the reporter on this story: Boris Groendahl in Vienna at bgroendahl@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net Mariajose Vera

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