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Austria is latest EU country to unveil tax targeting digital giants

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By Alice Tidey
Austrian Finance Minister Hartwig Loger (L).
Austrian Finance Minister Hartwig Loger (L).   -   Copyright  Austrian Ministry of Finance

Austria is planning to tax online advertising revenues, the finance ministry announced on Wednesday, as part of a package of measures targeting international tech giants like Google, Apple, Amazon and Facebook.

The measures are closely modelled on plans unveiled by the French government last month.

A 5% tax rate will, from 2020, apply to online advertising revenues from companies generating global sales of €750 million with at least €25 million from Austria.

A compulsory VAT will also be applied to digital retail platforms. Parcel deliveries from third countries were previously exempt from VAT if the value of the goods was inferior to €22.

"We are putting an end to this circumvention opportunity. In future, all sales will be taxed from the very first cent," Hubert Fuchs, Secretary of State of Finance, said in a statement.

The government estimates that it will raise €200 million through the new measures.

"Through the digital tax package, we are closing loopholes and thereby ensuring that large digital corporations, agency platforms and retail platforms are held to account. Through fair taxation of the digital economy, we are establishing equity in taxation," finance minister Hartwig Loger said.

The package makes Austria the second country in the European Union to unveil a new tax aimed at digital giants.

France introduced its own "GAFA tax" — named after the acronym of the US companies it targets: Google, Apple, Facebook and Amazon — last month.

It plans for a 3% levy on digital companies with global revenues of more than €750 million and above €25 million in France. The country estimates the tax will raise €500 million per year.