Image: APA/GEORG HOCHMUTH
In the future, companies with global sales of more than 750 million euros will have to pay at least 15 percent profit tax to the state. 138 OECD countries agreed on this in 2021. Finance Minister Magnus Brunner (ÖVP) sent a corresponding national law for review on Tuesday, the implementation of an EU directive on effective minimum taxation.
In addition to the classic low-tax countries such as the Cayman Islands, countries such as Bulgaria, Liechtenstein, Hungary and Cyprus also have tax rates below 15 percent. The additional tax revenue expected from Austria is not the focus of considerations. “It’s about implementing a uniform standard worldwide of at least 15 percent effective taxation,” said the responsible section head in the Ministry of Finance, Gunter Mayr, in a press conference.
In concrete terms, this means: Hungary, for example, could either increase its effective taxation to 15 percent or Austria could make up the difference if the parent company of the taxed company is in Austria.
Large corporations that have a global turnover of at least 750 million euros are affected by the global minimum tax. In Austria there are 120 parent companies of such groups, which have 2,380 domestic subsidiaries in Austria. There are also around 4,000 domestic subsidiaries of large foreign corporations.
The new regulation is scheduled to come into force on January 1, 2024. The additional tax revenue for Austria is “conservatively estimated” to be 100 million euros per year.
Taming the Giants
It is a question of justice “that digital giants also pay their taxes correctly in Europe,” said the finance minister in relation to Google, TikTok, Amazon and Facebook/Meta. The introduction of the digital tax in Austria in 2020 represents a first step towards more fairness between the analogue and digital economies.
However, the first pillar of the international agreement on the redistribution of taxation rights is still being negotiated; it is at odds with the USA and its preponderance of digital companies. The USA has not yet signed the treaty.
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