Aus­tria in bid to tax Google, Face­book

New Straits Times - - Business -

VIENNA: Aus­tria is seek­ing ways to make dig­i­tal ser­vices like Al­pha­bet Inc’s Google or Face­book Inc pay taxes for trans­ac­tions with the na­tion’s In­ter­net users, try­ing to plug gaps in a tax sys­tem still de­signed for brick-and­mor­tar busi­ness.

The most am­bi­tious part of the plan tar­gets the busi­ness mod­els of Twit­ter Inc, Google or Face­book: The tacit pact un­der which search­ing, lik­ing, post­ing and tweet­ing re­mains free as long as users let the com­pa­nies feed us­age data into al­go­rithms that help tai­lor ad­ver­tis­ing that can be aimed at the most likely buy­ers.

That ar­range­ment was a form of bar­ter­ing, and a value-added tax could be im­posed on such trans­ac­tions just as the levies were ex­tended in other parts of the econ­omy, said An­dreas Schieder, the par­lia­men­tary head of Aus­trian chan­cel­lor Chris­tian Kern’s So­cial Democrats.

“The busi­ness trans­ac­tion go­ing on here is that users are pay­ing with their per­sonal data,” he said.

Rais­ing more taxes from dig­i­tal busi­nesses was part of a broader plan to amend the coun­try’s cor­po­rate tax code.

The pack­age in­cluded clos­ing loop­holes that al­low “ag­gres­sive tax plan­ning” and cor­po­rate tax avoid­ance, which cost the Alpine coun­try as much as €1.5 bil­lion (RM7 bil­lion) a year, about a fifth of its an­nual cor­po­rate tax rev­enue, said Schieder.

In Syd­ney, Google said it would chal­lenge amended tax as­sess­ments is­sued by the Aus­tralian Tax­a­tion Of­fice (ATO), which was try­ing to claw back bil­lions of dol­lars from multi­na­tional cor­po­ra­tions cit­ing un­paid taxes.

In De­cem­ber, ATO said it was pur­su­ing seven global busi­nesses over A$2 bil­lion (RM6.5 bil­lion) in un­paid tax. Agen­cies

AP PIC

Google plans to chal­lenge amended tax as­sess­ments in Aus­tralia.

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