Austrian online companies will pay a 5% tax for their activities

On April 3, 2019, the Austrian government adopted a package on tax measures, which implies a 5% tax on the activities of online companies. These taxes will relate to the revenues of companies derived from sales of digital advertising services; in addition, the threshold for exemption from VAT at a reduced price will be set.

According to the Ministry of Finance, the digital tax will be applied to companies that:
• have global sales of at least € 750 million ($ 842 million)
• own a € 25 million in digital advertising revenue in Austria.

In other measures aimed at tightening the tax rules surrounding the digital economy, from 2020 digital platforms will be fully responsible for tax disclosure obligations. In practice, this will mean that all online platforms will be required to report all sales to the tax authority.

The digital tax package also guarantees that all products purchased from foreign suppliers from third countries through online stores will be subject to VAT. According to the existing rules, parcels imported to Austria from third countries for an amount of at least 22 euros are exempt from VAT.

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