The Ministry of Finance introduced a draft law on digital tax. It should implement a 7% unified digital tax on selected internet services provided in the Czech Republic. Digital tax should be applied to companies with a global turnover of over EUR 750 million a year and reaching in the Czech Republic a turnover of at least CZK 50 million per year from the taxable services.
Tax liability should arise in three areas:
> Placing targeted ads on the digital interface
> Use of the versatile digital interface
> Selling user data
Thus, some digital economy platforms which allow users to provide each other with services and goods for fees would also be subject to taxation, such as Facebook, Google, Airbnb or Uber.
This digital tax model has been designed earlier by the European Commission. However, at the EU level, this digital tax model has not yet been enforced. Nevertheless, the Ministry of Finance claims that they cannot wait for the EU and OECD to come to a decision.
“Negotiations in the EU and OECD will last for some time, but we can no longer wait and watch the unequal competition of global giants and our businessmen. That is why we have decided to introduce a Czech national regulation of temporary countervailing digital tax until the international compromise is reached,” says the Minister of Finance.
The digital tax in the Czech Republic should be calculated based on revenues from services provided during the tax period, namely the part that relates to Czech users. The tax period should be a calendar year. The tax should be paid in monthly advances and would be payable 3 months after the end of the tax year.
The law is expected to come into effect in mid-2020.