Federal government plans digital tax: Internet giants should pay!

Federal government plans digital tax: Internet giants should pay!

The federal government is planning to ask international internet companies in Germany to pay. A planned tax rate of ten percent on the advertising revenue of these companies is intended to help reduce technological dependence on US corporations and create more competition. This project will also be implemented based on the Austrian model, which has been charging a digital tax of five percent since 2020. Loud t-online.de The federal government hopes that this measure will strengthen the German market for digital services and fairer taxation of large, internationally operating companies.

The experience from Austria shows that despite the introduction of the digital tax, no noticeable price changes were observed for end customers. This could be a positive signal for German consumers, as corporations' profit margins have been reduced as a result of taxation. The debate about digital taxation is not new. Austria has been charging an advertising tax on traditional advertising services since 2000, while a digital tax has applied specifically to online advertising services since January 1, 2020, regulated in the Digital Tax Act (DiStG).

Digital tax details

In Austria, a digital tax applies to online advertising services that are provided domestically for a fee. Such services are considered to be provided domestically if they are received on devices with a domestic IP address. Examples of online advertising services include banner advertising and search engine advertising. Advertising services that are already subject to the Austrian advertising tax are exempt from the digital tax.

The tax obligation comes into force for companies that have a global turnover of at least 750 million euros and a domestic turnover of at least 25 million euros. The tax itself amounts to five percent of the assessment basis, i.e. the remuneration that the online advertising provider receives. Loud usp.gv.at Invoices must be made monthly and must be paid by the 15th of the second following month. These regulations ensure that international providers can also meet their tax obligations.

Federal government talks

Minister of State for Culture and Media, Wolfram Weimer, has already prepared talks with representatives from Google and other key industry players to discuss the introduction of the levy. The federal government is examining various approaches to establish a fair and effective tax regulation. Voluntary solutions are also being considered in order not to burden the digital economy while protecting the interests of consumers. Weimer emphasizes the broad agreement between the Union, the SPD and the Greens on their assessment of the situation.

Chancellor Merz is behind these plans, which aim for a fundamental realignment of the taxation of digital services in Germany. This could not only lead to fairer competition, but also generate additional revenue for the state that could be invested in important public issues. The topic of digital taxation therefore remains highly topical in the political discussion.