The proposed tax is likely to have an impact Google, Apple, Facebook and Amazon.
In a significant development, the Czech Finance Ministry stated, it was in the process of finalizing a plan to levy a 7% digital tax on global internet giants and would submit the proposal by the end of May.
The ministry stated, the tax would be aimed at select internet services – mainly advertising.
Once passed, the tax could become effective around mid 2020.
According to conservative estimates, the tax would add $219 million (5 billion crowns) annually to the Czechoslovakia’s budget.
Incidentally, members states of the European Union have yet to agree on a common plan to implement the “GAFA tax” – named after Google, Apple, Facebook and Amazon – so as to ensure that they pay a fair share of taxes on their massive business operations in Europe.
“The digital tax will apply to the most significant global players and is a reaction to the failure of solving this (issue) on the European Union level,” said Alena Schillerova, Czechoslovakia’s Finance Minister while adding, “The debate is not whether to implement the tax, but since when, in what shape and what level.”
The Czech tax would apply to targeted advertising placed on a digital interface by companies with a certain threshold of global turnover. The tax would also apply to sales of data gathered from the tech firms’ clients, said the Finance Ministry.
Germany has been pushing for a minimum level of corporate taxation globally.
($1 = 22.8600 Czech crowns)