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Austria follows France in GAFA tax on tech giants

Austria is following in the footsteps of at least one other European nation in taxing American tech giants. The country is looking to impose a specialized tech tax on mega companies such as Amazon, Apple, and Facebook.

Published: January 12, 2019, 9:53 am

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    France has already taken action on a national level to impose a tax rather than wait for an EU-wide agreement to come into force.

    Two weeks ago, French Economy and Finance Minister Bruno Le Maire announced the new GAFA – Google, Apple, Facebook, Amazon – tax would take effect on January 1. France hopes to generate as much as 500 million euros in the first year from the tech tax.

    Germany had previously denied a newspaper report it would begin implementing a 3 percent tech tax. Le Maire however has continued to pressure Germany into legislating a tax.

    According to Le Maire, “a small- or medium-sized company in an EU country such as France, Germany or Italy was paying 14 percentage points more in tax than Google, Amazon, Facebook and Apple. If we are incapable of re-establishing a fair tax system, of taxing the digital giants, we will pay for it at the ballot box”.

    This week, Austrian Chancellor Sebastian Kurz said the country will be following suit, and no longer wait for an EU-wide agreement.

    “In addition to an EU-wide move, we’ll also act on a national level. We will introduce a digital tax in Austria. The aim is clear — to tax companies that generate huge profits online, but pay hardly any tax on them, such as Facebook or Amazon,” Kurz said.

    It is expected to bring about 200 million euros to Austria’s state budget.

    According to Deutsche Welle, the European Commission estimates that tech firms pay an estimated 9 percent on profits, as compared to 23 percent for traditional companies.

    EU countries may soon see the introduction of an international digital revenue levy, to tackle tax avoidance of big technology firms. The plan was initiated by Austria which presided over the Council of the European Union in the second half of 2018.

    Germany has meanwhile been mired in a data hack scandal, after details about hundreds of German politicians, celebrities and public figures was published online via a Twitter account in one of the largest leaks in the country’s history.

    A 20-year-old student who disclosed the private data of some 1 000 public figures, also holds anti-Muslim views, German media reported on Friday. Spiegel reported that the suspect said that the AfD party would not be able to get rid of all the migrants and firmer action would be needed.

    A 19-year-old witness interviewed in the case, Jan Schuerlein, told broadcaster ARD that the suspect was “not right-wing extremist, but he had a big problem with the migrants and migrant policy”.

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