On Friday, the current President of the Council of EU Ministers of Finance (Ecofin) launches the "Google Tax" project: AUSTRIA is the graduated plan, which should lead to more tax revenues quickly. Numbers are Internet companies such as Google, Facebook, Amazon, which earn money in Austria, but do not pay corporation tax:
■ EU level: Löger wants the EU to speak with one voice internationally – and asks Google & Co. pay in Europe: there are different concepts, such as the "digital permanent establishment". For example, Amazon does not have a head office in Austria, but earns money here. There should be a new tax here. However, it is also possible to envisage a new EU-wide turnover tax (e-commerce package), which also operates under the current limit of 22 euro order value or third parties such as Alibaba or Amazon. Very quickly – around 2019 – could be an immediate measure, but also a "Digital Service Tax", a surcharge on conventional sales tax.
■ In person: if all else fails, the Minister of Finance does not shun national unilateralism. For example, the advertising tax could be extended to internet sales – with a lower rate of 3% (now 5%). That would bring millions. Across the EU, the Google tax would have a much greater potential – it is expected to be at least EUR 5 billion …
Digital load possible from 2019
OE24.TV: You want to tackle the burden on digital companies next week at the Ecofin Council. How should this work, for example Google and Facebook in Europe and in Austria to tax?
HARTWIG Löger: I want to put a particular emphasis on the fair taxation of the digital economy during the Ecofin Council under the Austrian Presidency. The European Commission also submitted a proposal in the spring under pressure from Austria. The first part deals with a tax on digital services, ie a turnover-based tax on digital services from companies in the respective countries. It represents 3% – a temporary solution that could enter into force quickly. Secondly, we want to define a digital factory to tax digital companies such as traditional companies.
OE24.TV: What do you mean by this digital device?
Löger: Most companies have a physical establishment. A carpentry shop in Austria, for example, has a building, machines – and thus generates profit. The establishment of the company forms the basis for taxation. Such physical operations do not exist in the digital economy – the company is located somewhere in the world and Austria has no chance to levy taxes on this company. It is therefore a new definition of the permanent establishment.
OE24.TV: when will the new digital load come from?
Löger: By the end of the year there should be an agreement on individual points. For example, service tax has the aspect of online advertising. In Austria it is currently the case that a 5% tax applies to classic printed advertisements, because online advertising is nothing at all. A first approach for me would be to make an approximation here in Austria. The model could, after the EU proposal of 3%, be able to introduce this 3% rate for online advertising and at the same time reduce it from 5% to 3% for traditional advertising.
OE24.TV: Could an Austrian solo effort be conceivable?
Löger: I am building on the fact that by the end of the year we can reach an agreement at European level. But if that does not work, we will act nationally.
OE24.TV: When will this new digital load come?
Löger: This is very fast and therefore requires the legal basis – but I can imagine that we can achieve this subject in 2019.
OE24.TV: What revenue do you expect?
Löger: Calculations speak for the first part within the whole EU of about 5 billion euros. Ultimately, the goal is a holistic tax on the digital economy in the EU, and much higher amounts are mentioned.
OE24.TV: in Austria the tax reform is approaching 2020. Experts have recently demanded a volume of 5 billion euros.
Löger: We want to reduce the burden of small and medium-sized incomes by about 3 billion euros. In addition, there will be relief in the field of corporate tax. In total we will achieve an order of magnitude of about 5 billion euros.