Austria says will tax internet giants 3 percent of ad revenue

FILE PHOTO: Austria's Chancellor Sebastian Kurz attends a news conference after a European Union leaders summit in Brussels, Belgium December 14, 2018. REUTERS/Eric Vidal

VIENNA (Reuters) - Austria on Thursday announced details of a plan to tax internet giants including Amazon AMZN.O, Google GOOGL.O, Facebook FB.O and Alibaba BABA.N 3 percent of their advertising revenue, accusing them of failing to pay their fair share.

The announcement comes weeks after Austria failed to clinch a European Union-wide deal on a digital tax in its capacity as president of the bloc, a role it relinquished on Jan. 1. While it is pressing ahead with its own national measure, Chancellor Sebastian Kurz said Austria also supported an EU-wide levy.

“There is a tax injustice here,” Kurz told reporters at the start of a cabinet meeting, adding that big international online firms pay significantly less tax on average than traditional companies. He said no Austrian firms would be hit by the tax.

“I am convinced that others in Europe will follow our example and that in turn will lead to more pressure for there to be a Europe-wide solution at the end of the day, hopefully,” said Kurz, whose conservatives govern in coalition with the far-right Freedom Party.

The tax will apply to firms with global annual sales of 750 million euros (£677.6 million) and annual sales in Austria of 10 million euros, the Finance Ministry later said in a statement.

The Finance Ministry added that it would wait until an EU finance ministers’ meeting in March known as Ecofin, before implementing its plan.

“If, however ,there is still no political agreement on a European digital tax at the March Ecofin, Austria will implement the digital tax package at the national level, as this government does not want to wait any longer,” it said, adding that the tax could bring in as much as 200 million euros per annum.

Reporting by Francois Murphy; Editing by David Goodman and Elaine Hardcastle