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Austria Publishes Tax Amendment Act 2020 Including Digital Tax on Advertising and Requirements for the Reporting of Cross-Border Arrangements — Orbitax Tax News & Alerts

Austria published the Tax Amendment Act 2020 in the Official Gazette on 22 October 2019. The key aspects of the Act include measures for the introduction of a digital tax on online advertising services and measures for the implementation of Council Directive (EU) 2018/822 of 25 May 2018 (DAC6) on reportable cross-border tax planning arrangements.

Digital Tax

The digital tax is levied at a rate of 5% on online advertising services provided by companies that are part of a group with annual worldwide revenue of at least EUR 750 million and sales in Austria of at least EUR 25 million from online advertising services. The basis of assessment of the digital tax is the fee that the online advertiser receives from a client, which is reduced by spending on up-market services by other online advertisers who are not part of their MNE group.

Austria's VAT authority is responsible for collecting the tax, which must be paid by the 15th of the second month after the claim to tax arises. An annual return is also required, which must be submitted within three months following the end of the year. However, the initial return deadline is set at 30 September 2019 for fiscal years ending before 1 July 2020.

The digital tax will apply to online advertising services provided after 31 December 2019, with regulations to be issued to finalize its implementation.

DAC6 Reporting Requirements

The DAC6 reporting requirements primarily apply for intermediaries that design, market, organize, or manage the implementation of a reportable cross-border tax planning arrangements. The reporting obligation may also be shifted to a taxpayer in some cases, including where the intermediary is subject to a duty of confidentiality in Austria, and the taxpayer has not released the intermediary from its obligation to maintain secrecy.

The requirements will come into force on 1 July 2020, with reportable arrangements from that date to be disclosed within 30 days from the day after the date the arrangement is made available for implementation, the day after the date the arrangement is ready for implementation, or the day the first stage of the arrangement's implementation is completed. Intermediaries may also be subject to a reporting requirement within 30 days from the date they provide, directly or through other persons, aid, assistance or advice with respect to designing, marketing, organizing, making available for implementation, or managing the implementation of a reportable cross-border arrangement. Further, an initial disclosure is required by 31 August 2020 where the first step of a reportable arrangement has been implemented between 25 June 2018 and 30 June 2020.