The move comes in response to the European Union’s failure to agree on a unified digital tax, leaving individual member states to make their own decisions on the matter. While there is general agreement in the Czech Republic on levelling a tax on Internet giants, there are divisions over how high that tax should be. The proposed 7 percent tax is the result of a compromise between the ruling parties and should apply to internet companies with a global turnover of over EUR 750 million (CZK 19.1 billion) and annual turnover in the Czech Republic of over CZK 100 million. Finance Minister Alena Schillerová presented the proposal at a press briefing in Prague on Tuesday.
“The tax will apply to users of multilateral digital interfaces, primarily targeted site advertising, social service charges, or the sale of user data but also digital economy platforms such as Airbnb and Uber that allow users to provide services and goods to each other for a transaction fee.”
While Austria and France introduced a 5 and 3 percent digital tax respectively, the Czech government has set its sights higher with a proposed 7 percent tax.