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Austria: Legislation introducing digital services tax

Austria: Legislation introducing digital services tax

The Austrian parliament passed legislation that introduces a tax on digital services. Under this new law, a tax on digital advertising will be imposed effective 1 January 2020.

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In general, the Austrian digital services tax will be imposed at a rate of 5% on the turnover from advertising services rendered by service providers in Austria. According to Article 1, section 1 of the law, a digital advertising service will be deemed to be rendered in Austria if the digital advertisement is received on a device with an Austrian IP-address and if the advertisement (also) addresses Austrian users.

Other terms in the legislation are defined as follows:

  • Digital advertising service: A digital advertising service is defined as an advertisement on a digital interface (e.g., banner advertisements, search engine advertisements, and comparable advertising services). For these purposes, comparable advertising services may be specified by a separate ordinance. Advertising services that fall under the provisions of the (standard) Austrian Advertising Act 2000 are not covered.
  • Service provider: There are two thresholds a service provider must satisfy to be determined to be a digital advertisement service provider within the meaning of Article 1 section 1 of the new law: 
    • A global turnover of €750 million or more, and
    • A turnover in Austria (from online advertising services) of at least €25 million
  • User: A user is defined as an individual or legal person that has access to a digital interface with a device.
  • Digital interface: A digital interface is defined as any kind of software including websites or part of websites as well as mobile applications.

The tax base for the digital services tax is generally the consideration the service provider receives for the provided services from the purchaser. The tax rate is 5%. The person liable for the digital services tax is the service provider, who must then calculate the amount of the digital services tax and remit the tax payment to the competent tax office on the fifteenth (15) day of the second month followed by the month in which the tax liability arises. The tax liability arises at the end of that month in which the taxable service are provided.

The service provider also must file an annual digital services tax return within three months after the end of the service providers’ financial year.


KPMG observation

There are concerns that the new Austrian digital services tax legislation may violate current EU law because it may be deemed to constitute state aid. According to the new law, €15 million resulting from the digital services tax is earmarked as funding for supporting the digital transformation of Austrian media companies. Also, it appears that the tax would generally affect foreign companies only—that is, that certain foreign companies would solely be subject to digital services tax in Austria.


For more information, contact a KPMG tax professional in Austria: 

Markus Vaishor | +43 1 31332 3652 | mvaishor@kpmg.at

Florian Popl | +43 1 31332 3105 | fpopl@kpmg.at

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

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