Austria pressing ahead with digital tax after EU-wide plan fails

Austria will press ahead with a proposed tax on internet giants after plans for an European Union-wide levy fell through this week, Finance Minister Hartwig Loeger said on Friday.

Austria said in January that it would tax firms like Google, Amazon, Facebook and Alibaba 3 percent of their advertising revenue from within Austria.

It said at the time that it would hold off on implementing that plan until an EU finance ministers’ meeting this week in case a deal was reached on an EU-wide digital tax, but when European ministers met they abandoned the idea.

“Once again Europe has not managed to find a common position on this issue,” Loeger told a news conference. “I am here today to say clearly again that we will implement and stick to what we have always said, namely introduce a national digital tax in Austria.”

Rather than submit legislation to parliament immediately, however, the government will first hold meetings of experts including representatives of Austria’s print and broadcast media, the advertising industry and the finance ministry to discuss the plans in coming weeks, he said.

Pending any changes agreed at those talks, the planned tax is part of a bundle of measures that includes lowering the threshold for value-added tax on packages, to one cent from 22 euros ($25). Many packages, particularly from China, have a declared value just below that threshold, Austria says.

It is also possible that an existing 5 percent tax on advertising revenue for traditional print and broadcast media will be lowered to 3 percent, Loeger said, adding: “The aim is to have fairness”.