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Austrian government to press ahead with tech giant tax that could fund local journalism

Austria’s government is pressing ahead with a tech giant tax and hinted that part of the money will be used to tackle digital duopolies by funding local journalism in a model that could be copied in other EU countries.

MP Hans Joerg Jenewein, a spokesperson for Austria’s populist Freedom Party, which forms part of the country’s coalition government, said Austria had been forced to go it alone with the measure because of the EU’s failure to force the likes of Facebook and Google to pay their taxes.

He said: “The negotiations at an EU level have been going on for years, with no result, so we are going it alone.

“Tech giants like Facebook and Google need to pay taxes in the country where profits are generated to support local services, including local media, and we are finalising the details now so it can be enforced from next year.”

Jenewein said he would like some of the money raised to go towards the country’s media subsidy – introduced in 1974 and known as the presseförderung – which has been consistently falling in recent years.

The Austrian plan follows on from news in France that Apple has agreed to pay ten years of back taxes, believed to total €500m (£439m), as the government cracks down on the big four tech giants.

France’s Minister of Finance, Bruno Le Maire, has also warned that French tax authorities are working to implement a massive tech giant tax, known as the “GAFA tax” after Google, Amazon, Facebook and Apple.

Le Maire intends the levy to be retroactive to 1 January 2019 and wants the government to have the new policy drafted by the end of this month so it can be put before the French Parliament for a vote, according to local media.

Le Maire said he expects the tax to fill the coffers of the French budget to the tune of €500m a year.

Apple declined to comment on the amount it paid to French tax authorities, but told local media: “The French tax authorities recently concluded a multi-year audit of the French accounts of the company and the adjustment will be communicated in our public accounts.”

The statement went on: “We know the important role that taxes play in society and we pay our taxes in all countries where we operate, in full compliance with local laws and practices.”

The company also said it was “proud” of its contribution to the French economy.

Neither the General Directorate of Public Finance (DGFIP) nor the Ministry of Public Accounts have confirmed this information, citing “tax secrecy”.

The French have also hit Google with a €50m fine for avoiding the new EU General Data Protection Regulation (GDPR) data protection laws.

According to at least one report, the European Commission estimates that tech firms pay an estimated 9 per cent on profits – or nothing at all – compared to 23 per cent for traditional companies.

Picture: Reuters/Leonhard Foeger

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