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Vienna, 03.04.2019 Löger/Fuchs: 5% digital tax on large digital corporations Digital tax package to raise EUR 200 million in revenue

Austrian Finance Minister Hartwig Löger and State Secretary Hubert Fuchs are today sending the first part of their digital tax package for evaluation. The package provides for the introduction of a 5% digital tax on large digital corporations, a liability clause for digital agency platforms, and a compulsory VAT for digital retail platforms.

"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. Through fair taxation of the digital economy, we are establishing equity in taxation," declared Finance Minister Hartwig Löger.

In future, a digital tax of 5% will be introduced for large digital corporations. This will be levied on online advertising revenue in relation to companies with global sales of EUR 750 million, of which EUR 25 million originate from digital advertising sales in Austria. EUR 15 million of this revenue will be used for the digital transformation process of Austrian media companies. "Both Austrian and traditional media face enormous challenges as a result of the market power of large digital corporations, and this cannot be overcome by solely using commercial business models. In order to strengthen Austria as a media location and to secure the country's identity for the future, a digitalisation fund will be set up. We will use this to support the digital transformation process of Austrian media companies," added Mr Löger.

By way of further measure, digital agency platforms are to assume full liability for disclosure obligations. From 2020 onwards, booking platforms will be required to notify all bookings and sales to the authorities. If they commit a breach of their duty of care in this regard, the platform will be liable for untaxed sales of "letting agents". "Through this measure, we are taking digital agency platforms to task. No one is entitled to evade the obligation to pay tax," stressed State Secretary of Finance Hubert Fuchs. 

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 totalled EUR 22 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.