Czech government proposes levelling 7 percent tax on Internet giants
The Czech government has followed the example of other European countries in approving a digital tax on Internet giants such as Facebook, Google, Amazon and Apple. The proposed 7 percent tax on services provided in the Czech Republic should bring in approximately 5 billion crowns of additional revenue a year.
“The tax will apply to users of multilateral digital interfaces, primarily targeted site advertising, social service charges, or the sale of user data but also digital economy platforms such as Airbnb and Uber that allow users to provide services and goods to each other for a transaction fee.”
While Austria and France introduced a 5 and 3 percent digital tax respectively, the Czech government has set its sights higher with a proposed 7 percent tax. Jan Hamáček, head of the junior coalition party of Social Democrats, welcomed the agreement reached.
“I am very glad that we opted for a more ambitious 7 percent tax. Although other European countries have a lower tax, I think that 7 percent is adequate to the profit these giants make in the Czech Republic. Part of the profit should definitely stay in this country.”
The tax would not apply to companies which have digital services as a side income, and the deciding threshold would be 10% of total revenues.
The bill may still meet some opposition in Parliament since opposition MPs would have preferred to see a lower tax imposed, but in view of the government’s majority in the lower chamber, which can override a veto from the Senate, it should have a smooth passage through Parliament. The new tax should come into force next year. The giants whom it concerns have so far refused to comment on the development.