Austria tackles the digital economy

Austria is planning to raise more than 200 million euros per annum in taxes from the digital economy. This apparently represents 0.2 percent of Austria’s total 2018 tax income.

Two thirds of this tax is expected to come from phasing out the low value goods exemption from import duties that allows non-EU online businesses to deliver goods worth less than 22 euros into Austria duty free.

There is also a 5 percent digital services tax on advertising sales by certain online businesses.  This compares with the original EU proposal of 3% and the UK’s proposed 2% rate of DST.

Most controversially, perhaps, is a requirement for online marketplaces not only to provide the Austrian tax authorities with certain information on transactions on their platform but also for the platform to potentially be liable if an Austrian user does not pay the tax due on the transaction.  This proposal goes far further than the code of conduct for platforms proposed last week by the OECD working group and is likely to be strongly resisted by the platform operators.