Wednesday, January 8, 2020
The Austrian Ministry of Finance has published guidance in English regarding the Digital Tax Act 2020, which was approved by the upper house of the Austrian parliament on October 10, 2019, and which applies to the provision of digital advertising services from 2020.
According to the guidance, online advertising services are subject to the digital tax if, with effect from January 1, 2020, they are rendered by online advertising providers to consumers Austria in return for payment. An online advertising service is deemed to have been rendered within Austria if it is received on the device of a user with an Austrian IP address and, in terms of content and design, is also directed at Austrian users.
Advertisements placed on a digital interface, such as banner advertising, search engine advertising, and comparable advertising services, are considered taxable advertising services.
Advertising services that are subject to the existing advertising tax are not considered taxable services under the digital tax law.
The tax applies to advertisers with a global turnover of at least EUR750m (USD836m) with turnover in Austria of at least EUR25m.
The guide explains how to calculate liability to the levy, which features a five percent rate.
The tax must be calculated and paid by the 15th of the second month after tax liability has arisen. Taxpayers must also submit an annual digital tax return. This must be filed three months after the financial year to which the return relates and must include information on online advertising services and associated fees, as well as worldwide revenues generated from advertising sales.
However, for financial years ending before July 1, 2020, the annual tax return must be submitted by September 30, 2020, at the latest. The guidance explains how such returns must be filed.
The Austrian digital tax is seen as an interim measure until a permanent solution to the tax challenges of the digital economy is agreed at international level.