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-and-mortar 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 to the most likely buyers.
That arrangement is a form of bartering, and a value-added tax could be imposed on such transactions just as the levies are extended in other parts of the economy, said Andreas Schieder, the parliamentary head of Austrian Chancellor Christian Kern’s Social Democrats, which govern in a coalition with the conservative People’s Party.
“The business transaction that’s going on here is that users are paying with their personal data,” Schieder told journalists. “The business model of those Internet companies is based on massive revenues that are generated with the help of those data.”
Raising more taxes from digital businesses is part of a broader plan to amend the nation’s corporate tax code. The package also includes closing loopholes that allow “aggressive tax planning” and corporate tax avoidance, which cost the nation as much as 1.5 billion euros (US$1.6 billion) a year, about a fifth of its annual corporate tax revenue, Schieder said.
The Social Democrats’ plan has two other elements targeted at Internet companies: It would extend tax on advertising revenue to digital formats, and it would tax purely digital services that are acquired by Austrian customers from companies with no physical presence in the country.
Schieder said the Organization for Economic Co-operation and Development (OECD) has made proposals for calculating and implementing such taxes, especially in its Base Erosion and Profit Shifting project.
“We need a new approach to make sure that taxes are paid where revenue and profit is made,” Schieder said. “The OECD has made practical suggestions how to define digital establishments for tax purposes.”
The proposals would need the agreement of conservative Austrian Minister of Finance Hans Joerg Schelling.
The goal to raise tax revenue from digital companies and to tax international companies “more efficiently” is part of the government’s policy update agreed in January.
Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table. In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US. “The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said. Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of
‘LEGACY CHIPS’: Chinese companies have dramatically increased mature chip production capacity, but the West’s drive for secure supply chains offers a lifeline for Taiwan When Powerchip Technology Corp (力晶科技) entered a deal with the eastern Chinese city of Hefei in 2015 to set up a new chip foundry, it hoped the move would help provide better access to the promising Chinese market. However, nine years later, that Chinese foundry, Nexchip Semiconductor Corp (合晶集成), has become one of its biggest rivals in the legacy chip space, leveraging steep discounts after Beijing’s localization call forced Powerchip to give up the once-lucrative business making integrated circuits for Chinese flat panels. Nexchip is among Chinese foundries quickly winning market share in the crucial US$56.3 billion industry of so-called legacy
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday held its first board of directors meeting in the US, at which it did not unveil any new US investments despite mounting tariff threats from US President Donald Trump. Trump has threatened to impose 100 percent tariffs on Taiwan-made chips, prompting market speculation that TSMC might consider boosting its chip capacity in the US or ramping up production of advanced chips such as those using a 2-nanometer technology process at its Arizona fabs ahead of schedule. Speculation also swirled that the chipmaker might consider building its own advanced packaging capacity in the US as part
A move by US President Donald Trump to slap a 25 percent tariff on all steel imports is expected to place Taiwan-made steel, which already has a 25 percent tariff, on an equal footing, the Taiwan Steel & Iron Industries Association said yesterday. Speaking with CNA, association chairman Hwang Chien-chih (黃建智) said such an equal footing is expected to boost Taiwan’s competitive edge against other countries in the US market, describing the tariffs as "positive" for Taiwanese steel exporters. On Monday, Trump signed two executive orders imposing the new metal tariffs on imported steel and aluminum with no exceptions and exemptions, effective