Austria is the latest EU country to propose its own digital services tax, after the EU was unable to reach agreement on the measure. The tax is part of a package of measures presented by Finance Minister Hartwig Loeger aimed at closing loopholes and bringing in more tax from digital companies, with the combined measures expected to raise around EUR 200 million for the state.
The 5 percent service tax would apply to companies generating worldwide revenues of at least EUR 750 million and EUR 25 million in digital advertising revenue in Austria. Part of the proceeds would go to helping the national and traditional media sector to adapt to the digital era. Online ad serving platforms will be required to report their sales to the state so it can collect the tax. This is expected to take effect from 2020.
The advertising tax is part of a broader package of digital tax measures proposed by the government in order to boost tax income from online businesses. Also planned is an end to the VAT exemption for purchases of less than EUR 22 made online from a foreign seller, as it has been repeatedly abused. Going forward, all online purchases from outside the EU will be subject to VAT. The European Commission has already proposed ending this exemption across the EU.
The Austrian government has formed an expert group to help work on further plans for improving tax collection from digital businesses. These include representatives from industry groups in broadcasting, newspapers and online advertising and the general business lobby.
