Unilateral Measures related to taxation of the Digital Economy

Imposed and proposed unilateral measures to adress taxation of the Digital Economy

 

CountryMeasurePercentageDecriptionEffective data
Czech Republic DST (Law on selected digital services tax)The Czech Ministry of Finance submitted a finalized proposal to the Czech Government on Sept. 5, 2019, which is now pending the Czech Parliament’s approval. Effective date: to be determined, but likely sometime in 2020.
January 18 - The Czech government approved a 7% digital tax proposal on Monday aimed at boosting state coffers by taxing advertising by global internet giants like Google and Facebook, the Finance Ministry said.

The proposed tax, which still must make it past lawmakers in parliament, covers revenue gained from targeted advertising, providing digital market places, and user data sales.
? 2020
FranceDST (Tax on certain services provided by the enterprises of the digital sector)Enacted on July 11, 2019, and entered into force on July 26, 2019. Retroactive from January 1, 2019
IndiaEqualization LevyEqualization levy at a rate of 6% applies to persons making outbound payments to nonresident companies for digital advertising services (functionally operates as a DST imposed on a withholding basis).June 1, 2016
ItalyDST (Web Tax)Enacted in 2018 via the 2019 Budget Law, but the implementing legislation was never issued. On October 16, 2019, the Italian Government announced it would adopt a DST for 2020, and included a DST in its 2020 Budget Plan.

? 2020
SpainDTSDraft legislation was approved by the Spanish Cabinet on October 19, 2018. Parliamentary consideration has been delayed by Spanish national elections.2020
TurkyDTSDraft legislation was published October 24, 2019 with a 7.5% rate. Draft law is subject to vote by the Turkish Parliament, and must be approved by the Turkish President before it is published in the Official Gazette. The bill would authorize the Turkish President to increase the DST rate up to double the stated rate.digital service tax has been enacted, together with an accommodation tax, luxury residence tax and other important tax amendments under law No. 7194, published on the Official Gazette dated December 7. 2019
TurkyIncome Tax Withholding on E-Commerce PaymentsTurkey introduced a 15% withholding tax obligation in 2016 that encompasses payments made through e-business and other online activities. As of January 1, 2019, Presidential Decree No. 476 also subjected advertising services provided through the internet by nonresidents to this withholding tax.Enacted
UK DTSDraft legislation and guidance was released on July 11, 2019 and was subject to consultation ending on September 5, 2019. While not yet adopted, likely to be adopted as the draft legislation is included in the budget (Finance Bill 2019-20).April 1, 2020
AustraliaMultinational Anti-Avoidance Law ("MAAL")The MAAL imposes tax on certain profits earned by nonresident enterprises that sell remotely into Australia.January 1, 2016
AustraliaDiverted Profits Tax The DPT is intended to operate in addition to the MAAL. At a high level, the DPT applies to multinationals with annual global income of AUS$ 1 billion or more where, based on information available to the Australian Commissioner of Taxation, it is reasonable to conclude that profits have been artificially diverted from Australia.July 1, 2017
AustriaDigital Advertising Tax (Digital Tax Law 2020)Proposed digital ad tax, which will apply at the rate of 5% to revenue from online advertising for certain companies. Passed by the lower chamber of the Austrian legislature on September 19, 2019, and by the upper chamber on October 10, 2019. The Austrian President must sign the law, after which it will be promulgated.expected January 1, 2020
New Zealand PE Anti-Avoidance RuleIn June 2018, a bill adopting a DPT-inspired PE anti-avoidance rule was passed into law in New Zealand.July 1, 2018
DSTOn June 4, 2019, the New Zealand government released a discussion document on the taxation of digital companies, which included a proposed DST measure.? 2020
Paraguay Income Tax Withholding on Certain Digital ServicesPayments for certain "digital services" provided through the internet to Paraguayan recipients are considered Paraguayan source income under a tax reform bill gazetted on September 25, 2019. A withholding tax of 15% is due on such payments made to nonresident providers.December 25, 2019
VietnamE-Commerce Tax (Law on Tax Administration, Article 42)Vietnam requires foreign suppliers engaged in "e-commerce business activities" to directly file and pay tax in Vietnam. The law will take effect from July 1, 2020. Foreign suppliers that do not have a PE in Vietnam will be responsible for filing and paying tax in Vietnam. In the absence of a filing by the supplier, banks will be responsible for collecting and paying the tax.June 12, 2019
BelgiumDTSJanuary 2019 proposal from member of Belgian Parliament being considered by the Finance Committee, pending vote.?
CanadaDST (Taxation of large technology companies)Announced by the Liberal Party as part of its 2019 election platform on September 29, 2019. The Office of the Parliamentary Budget Officer released a Cost Estimate for the proposal on the same day containing details of the proposal.April 1, 2020
RussiaDSTProposed by the Finance Ministry on October 3, 2019. Draft legislation has not yet been released.? 2020
MalaysiaDSTThe digital tax was announced during Budget 2019, which outlined that a 6% service tax would be imposed on foreign digital services – including software, music, video and digital advertising
Enacted and effective 1. January 2020
ZimbabweDSTThe tax was introduced in Zimbabwe in January 2019 on income from foreign domiciled satellite broadcasting services in respect of the provision or delivery of television or radio programmes, and on electronic commerce operators in respect of the provision or delivery of goods or services in Zimbabwe. The rate is a flat 5%.Announced 14 November 2019 to be enacted on adoption of the national 2020 budget
MexicoWHTAdministrative rules for digital platforms, in an agile and simple way, to register as withholding tax and contribute to the tax authority to have a better tax compliance in the country. With the publication of the operating rules, which are part of the Miscellaneous Fiscal Resolution for 2020, the digital platforms will have a transition period of six months before beginning to comply with the legal provisions on digital economy planned for the 1st of July of this year.July 1 2020
Dominican RepublicDSTSeptember 26 the Dominican Republic issued its budget for fiscal year 2020, proposing new taxes on companies that operate through a digital platform. The tax rate for digital services will be 10% and will be applied to online subscription services.If approved the implementation of the digital tax will be effective starting fiscal year 2020.

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