Digital tax

from Wikipedia, the free encyclopedia

The term digital tax describes various concepts for taxing the digital economy . Digital companies can offer their products across borders and generate profits without having a traditional business location in the country concerned . In addition, intangible assets, data and services that are difficult to quantify are increasingly becoming a commodity. Therefore, their income is often not recorded in tax law and it remains untaxed. This tax justice is to be eliminated by a digital tax .

background

The previous tax models show weaknesses because they were originally intended for “conventional companies” and have now become obsolete. Typical online companies are digitally present in several countries, offer their services to consumers there, conclude contracts with them and thus make extensive use of the infrastructure and the institutions of the rule of law , while from a tax point of view they are not considered to be present or their economic models are not are recorded as taxable.

Companies affected by the taxation of digital processes are primarily global corporations whose resources and market position are sufficient to also take advantage of tax advantages globally by shifting profits to countries with lower tax rates. Cross-border digital companies can use aggressive tax planning to reduce effective taxation to zero. Above all, this includes US technology companies that were the pioneers of e-business , in particular the Internet companies Google (or today's Google parent Alphabet ), Apple , Facebook and Amazon (generally also referred to as GAFA , hence sometimes also as GAFA tax), the "Big Four" of online trading (e-commerce) and online advertising . In addition, there is an increasing number of actors from Asia, such as Alibaba .

Viewpoints and concepts

European Union

A special situation arises in the EU because there is a common market , but no common tax policy . In general, taxation is the sovereign law of the individual member states.

On average, digital business models in the EU are subject to an effective tax rate of only 8.5%, while conventional companies are subject to average effective tax rates of 21 to 23% (as of 2017). The problem is exacerbated by the fact that individual member states like Ireland grant unilateral tax advantages so that the effective tax rate can even be below zero.

In his State of the Union address on September 13, 2017, Commission President Jean-Claude Juncker underlined the European Commission's call for fair taxation for the digital economy. In order to be able to make faster and more efficient decisions, he advocated introducing qualified majority voting instead of unanimity for decisions on fair taxation of the digital economy and on financial transaction tax.

At the informal ECOFIN Council in Tallinn on September 16, 2017, the Estonian EU Council Presidency, with the support of numerous member states, called on the Commission to propose effective solutions for fair taxation of the digital economy. According to the EU Council Presidency, every additional year in which nothing is done leads to further distortions of competition, lost tax revenues and individual countries can continue to undermine the internal market. This gap in international tax law must therefore be closed urgently.

On September 21, 2017, the EU Commission presented a roadmap according to which the authority wants to examine different options for a digital tax. The aim of the Commission initiative is that corporate earnings are taxed where they arise in the digital world in the long term. The unanimity requirement for new regulations is seen as a political hurdle, since countries such as Ireland and Luxembourg, which have so far granted Internet companies tax advantages, oppose common rules.

On March 21, 2018, the European Commission presented a “proposal for a Council Directive laying down rules for corporate taxation of a significant digital presence”. The proposed directive contains a legal definition of a digital permanent establishment . In addition, a “proposal for a Council Directive on the common system of a digital tax on income from the provision of certain digital services” was submitted. This indirect tax would be applied to income generated from certain digital activities that have not yet been taxed at all. This is intended to tax sales through business with customer data, for example through personalized advertising or through the mediation of providers and customers on platforms such as B. Airbnb can be achieved. This does not mean revenue from sales of films or books, for example. The tax revenue would be collected from the Member States in which the users are located. Taxation would only apply to companies with total annual global revenues of EUR 750 million and EU revenues of EUR 50 million. A tax rate of three percent is proposed, which would result in total annual tax revenues of around five billion euros for the member states.

On December 13, 2018, the European Parliament approved the proposal of the EU Commission by a large majority. The European parliamentarians called for the limit to be reduced to 40 million euros in online sales within the EU per year. However, the EU Parliament only has an advisory role in the area of ​​taxation.

In March 2019, however, this proposal by the EU Commission, which was adopted by the European Parliament, ultimately failed due to resistance from some finance ministers from Denmark, Ireland, Finland and Sweden.

Negotiations between the EU and the USA on a uniform digital tax were broken off in June 2020 by the US Treasury Secretary Steven Mnuchin , referring to the lack of progress in negotiations.

Germany

According to an Emnid survey, 75 percent of Germans are in favor of large Internet companies paying taxes on their sales in the respective EU country. In the coalition agreement of the 19th parliamentary term of February 7, 2018, it was agreed: “We will take measures for an appropriate taxation of the digital economy”.

Germany wants to campaign for the EU to agree on a digital tax by the end of 2018. This emerges from the “Meseberg Declaration” of June 2018, which was presented by Chancellor Angela Merkel and French President Emmanuel Macron. However, on November 18, 2018, Federal Finance Minister Olaf Scholz rejected the rapid introduction of an EU digital tax. Rather, he wants to  agree rules on minimum taxation and taxation of digital companies within the framework of the Organization for Economic Cooperation and Development (OECD). However, an agreement at the OECD level - of which the USA is also a member - is considered unlikely, as the digital tax would primarily affect US companies. The French government therefore accuses the German government of slowing down this issue.

France

On December 17, 2018, Economics and Finance Minister Bruno Le Maire announced the introduction of a digital tax on January 1, 2019, which will tax not only sales tax, but also advertising income and the sale of personal data. The three percent tax is to be levied on companies that have a turnover of 750 million euros worldwide, of which more than 25 million euros in France, and would affect about thirty mostly US companies. It should lead to additional income of around 500 million euros per year.

At the same time, the French government under President Emmanuel Macron continues to rely on a digital tax within the European Union.

However, France, probably under pressure from the USA, suspended this tax again, as became known at the 2020 World Economic Forum in Davos. A final solution to this question was promised by the end of 2020, probably also because a globally mutually agreed solution was being sought.

Italy

In Italy, the government is planning a digital tax at national level. The US company Apple had already accepted an additional payment of 300 million euros in December 2015 in a tax dispute with the Italian tax authorities. In May 2017, Google agreed to pay 306 million euros for profits generated in Italy between 2009 and 2013 but taxed in Ireland. Amazon signed an agreement to pay Italy 100 million euros in December 2017. Facebook also accepted an additional payment of more than 100 million euros for the period 2010 to 2016.

Austria

According to a Kieskompas survey from 2018, 87.8 percent of Austrians support the introduction of a digital tax for large companies.

At the end of December 2018, Federal Chancellor Sebastian Kurz announced the introduction of a national digital tax to partially finance a major tax reform . The aim is "a taxation of corporations that make big profits online but hardly pay taxes". The announcement caused a stir in international media, especially in the EU. In April 2019, the Federal Government Kurz I initiated a digital tax , which, however, was not implemented due to the government crisis at the time, and will not be introduced until 2020 ( Digital Tax Act 2020 ). The package of measures includes full VAT liability for online shipping also for companies located abroad (by the Platform itself is considered the supplier), an exclusive import sales tax for products purchased via online platforms, and an advertising tax also for online advertising , as well as an obligation to provide information about bookings and sales for brokerage platforms .

Details cause criticism. It is alleged that, to facilitate the recording of online bookings, a “total surveillance” of end users would be introduced, which comes close to data retention . Other critics assume that - as far as advertising-financed offers and sales platforms are concerned - it is not large corporations that will pay the tax, but the advertising companies themselves and, as a result, consumers, for example, warned by trade associations such as the Federal Trade and Advertising and Market Communication departments of the Austrian Chamber of Commerce . This in itself economically completely normal process, whereby a provider allows its costs to flow into its pricing, is desired by the legislature, because it compensates for illegitimate competitive advantages and opens up fairer opportunities for competitors. The Association of Austrian Newspapers  (VÖZ) welcomed this part of the digital tax package in a broadcast.

Since the end of January 2020, a letter has been circulating from Google announcing that the company will pass the new digital tax on to Austrian advertising customers. To what extent the de facto alternatives to another - cheaper - to switch providers because of the dominant position of the US search engine already an antitrust matter is, is part of the international debate.

At the beginning of June 2020, the United States initiated proceedings against Austria's digital tax because the measures are believed to be discriminatory against US corporations. Punitive tariffs are threatened, which should be a multiple of the new fee. The digital tax should bring the Austrian tax authorities around 20 million euros per year in additional income.

Spain

At the national level, the Spanish government is also planning to introduce a digital tax with a bill published on October 23, 2018.

United Kingdom

On October 29, 2018, British Treasury Secretary Philip Hammond announced that Internet companies in Great Britain would pay a digital tax after leaving the EU, the digital services tax . According to Hammond, the tax should be levied on sales made on British soil and only apply to companies with annual global sales in excess of £ 500 million . The corporations should then pay a tax of two percent on the money earned with British users. The UK government expects the tax to generate annual revenue of around £ 400 million from 2020. Hammond wants to work to ensure that other states follow suit.

literature

  • Marius Gehler: Introduction of a digital tax. EU level considerations and national initiatives , Grin Verlag, 2019, ISBN 978-3346008947 .
  • Kolja van Lück: Tax Law and the Digital Economy: Approaches to Appropriate Taxation of Multinational Companies in the Digitized Economy , LIT Verlag, 2018, ISBN 978-3643142146 .

Individual evidence

  1. ↑ a b Communication from the Commission to the European Parliament and the Council: A fair and efficient tax system in the European Union for the digital single market. European Commission, September 21, 2017, accessed December 16, 2018 .
  2. ↑ Digital Tax Index 2017. PricewaterhouseCoopers GmbH, May 2017, accessed on December 16, 2018 (English).
  3. ↑ Tax digitization index 2017. PricewaterhouseCoopers GmbH, May 2017, accessed on December 30, 2018 .
  4. ↑ a b Werner Mussler, Brussels: Digital companies: The road to Internet tax in Europe is long . In: FAZ.NET . ISSN  0174-4909 ( faz.net [accessed December 16, 2018]).
  5. ↑ European Commission - PRESS RELEASES - Press release - PRESIDENT JEAN-CLAUDE JUNCKER State of the Union Address 2017 *. Retrieved December 16, 2018 .
  6. ^ Presidency Issues Note for the informal ECOFIN Tallinn: Discussion on corporate taxation challenges of the digital economy. September 16, 2017, accessed December 16, 2018 .
  7. ↑ Proposal for a Council Directive laying down rules for business taxation of a significant digital presence. European Commission, March 21, 2018, accessed December 16, 2018 .
  8. ↑ Proposal for a Council Directive on the common system of a digital tax on income from the provision of certain digital services. European Commission, March 21, 2018, accessed December 16, 2018 .
  9. ↑ Fair taxation of the digital economy - Taxation and Customs Union - EU Commission. Retrieved December 16, 2018 .
  10. ↑ EU digital tax - The difficulty of taxing digital corporations. Accessed December 16, 2018 (German).
  11. ↑ EU digital tax: Parliament braver than EU member states. Retrieved December 28, 2018 (German).
  12. ↑ Texts adopted - Thursday, December 13, 2018 - Common system of a digital tax on income from the provision of certain digital services * - P8_TA-PROV (2018) 0523. European Parliament, accessed December 28, 2018 .
  13. ↑ Commission proposal: EU Parliament wants to tighten digital tax . In: Spiegel Online . December 13, 2018 ( spiegel.de [accessed December 28, 2018]).
  14. ↑ Tagesschau.de: EU Commission failed, no digital tax at EU level for the time being , March 12, 2019
  15. ↑ Taxation of Google and Amazon: USA announce withdrawal from negotiations on digital tax Report of the daily newspaper Handelsblatt on June 18, 2020, accessed on June 18, 2020
  16. ↑ Brussels: Headwind for Olaf Scholz - Clear criticism of the German-French proposal on financial transaction tax. Retrieved December 16, 2018 .
  17. ↑ Plans by Merkel and Macron: Will the digital tax come in 2018? In: FAZ.NET . ISSN  0174-4909 ( faz.net [accessed December 16, 2018]).
  18. ↑ Finance Minister: Before Macron's visit: Scholz slows down the introduction of the digital tax. November 18, 2018, accessed December 16, 2018 .
  19. ↑ Conflict with France: Scholz slows down EU digital tax. November 18, 2018, accessed December 16, 2018 .
  20. ↑ a b France is introducing its own digital tax at the turn of the year. In: Deutsche Welle. December 17, 2018, accessed December 17, 2018 .
  21. ↑ Ce qu'il faut savoir sur la taxe Gafa (enfin) mise en place en 2019. In: leprogres.fr. December 17, 2018, accessed December 17, 2018 (French).
  22. ↑ dpa / Reuters: Digital tax: France is not waiting for Germany . In: Frankfurter Allgemeine Zeitung . March 4, 2019, ISSN  0174-4909 ( faz.net [accessed March 10, 2019]).
  23. ↑ EpochTimes.de: Agreement on the outskirts of Davos - France and USA agree on customs duties and digital tax. January 22, 2020, accessed on January 23, 2020 (German).
  24. ↑ Negotiations with the USA: France postpones digital tax. Retrieved January 23, 2020 .
  25. ↑ tagesschau.de: Trade dispute with the USA: France suspends digital tax. Retrieved January 23, 2020 .
  26. ↑ a b Facebook accepts payment of millions in arrears to Italy. Zeit.de, 22 November 2018.
  27. ^ Paul Tang: Widespread public support for tax on tech giants. Retrieved December 30, 2018 .
  28. ↑ André Krouwel, Yordan Kutiyski, Tom Etienne: Public perceptions towards taxing digital companies in six countries. Kieskompas, December 3, 2018, accessed December 30, 2018 .
  29. ↑ Schramm Monika: Chancellor Kurz in an interview with TT: “We will introduce the digital tax”. December 29, 2018, accessed December 30, 2018 .
  30. ^ Chancellor Kurz "Will introduce digital tax in Austria". In: kleinezeitung.at. December 30, 2018, accessed December 31, 2018 .
  31. ↑ ORF at / agencies red: online giants: government presented digital tax. April 3, 2019, accessed April 11, 2019 .
  32. ↑ What does the planned digital tax package include? , SPT Tax News, May 2019.
  33. ↑ Digital Tax Package 2020. WKÖ Advertising and Market Communication, April 8, 2019 (accessed February 3, 2020).
  34. ↑ Digital tax - concerns of the WKÖ trade division come true. WKÖ Federal Trade Division, August 6, 2019 (accessed February 3, 2020).
  35. ↑ VÖZ welcomes the National Council resolution on digital tax - "More fairness in competition between international online groups and the local media". Press release Association of Austria. Newspapers, APA OTS0123, September 20, 2019.
  36. ↑ Google passes the new digital tax on to Austrian customers - derStandard.at. Accessed January 31, 2020 (Austrian German).
  37. ↑ cf. Pascal Salin: It was not Google who abused its market position, but the EU. In: welt.de, August 16, 2018.
  38. ↑ ORF at / agencies red: US proceedings against Austrian digital tax. June 11, 2020, accessed June 15, 2020 .
  39. ↑ Germany Trade and Invest: Spain - Draft law on a digital tax , accessed on July 11, 2019
  40. ↑ Digital tax: Spain hopes for billions in revenue , accessed on February 19, 2019
  41. ↑ Björn Finke: Great Britain plans digital tax . In: sueddeutsche.de . October 29, 2018, ISSN  0174-4917 ( sueddeutsche.de [accessed December 16, 2018]).
  42. ↑ Brexit: Great Britain announces digital tax. Retrieved December 16, 2018 .