Czech Republic authorises 7% digital tax proposal

On Monday, the Czech government authorised a 7% digital tax designed to boost state funds by imposing taxation on advertising by internet giants such as Google and Facebook. 


The proposed tax, said the Finance Ministry, which is still awaiting approval from lawmakers in parliament, will encompass revenue accumulated from targeted advertising, offering digital market places and user data sales, and will be directed towards services offered to Czech users. 


The taxation will be applicable to firms with global revenue totalling over €750 million per year, producing turnover worth 100 million Czech koruna in the local market and a reach surpassing 200,000 user accounts. 


The Finance Ministry expects the tax, which will be short-term until a global agreement can be reached, will produce 2.1 billion koruna next year if it is implemented in June, and roughly 5 billion per year in the following years. 


The Czech Republic is not the first country in the Europe to impose digital taxation, after the Europe Union did not comply with a eurozone-wide agreement announced in 2018. 


The Finance Ministry said the tax proposal was founded on the previous ideas for pan-European regulation. 


France and Italy, among the countries who adopted similar action, have upset the United States, home to the largest internet giants globally. 


 


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