This week the taxing of digital companies is in the centre of attention. Earlier this week we already informed our readers that the European Commission launched an agenda to ensure what it calls a fair and growth-friendly way of taxing digital companies. On September 22, 2017 the OECD on its turn opened a public consultation regarding the tax challenges raised by digitalisation and the potential options to address these challenges. But there is also news to be reported from the Austrian Government in this respect.
On September 20, 2017 the Austrian Ministry of Finance issued a press release announcing that the Austrian Council of Ministers gave the Austrian Minister of Finance a mandate to re-negotiate the Austrian – Irish DTA. In a reaction the Austrian Minister of Finance stated that in order to achieve quicker results with respect to the introduction of digital/virtual permanent establishments work should not only be undertaken on a multilateral level (for example at an OECD or EU-level), but also on a national level).
The Austrian Minister of Finance furthermore stated that he is keen to exhaust all bilateral opportunities for achieving rapid results. Since Ireland currently hosts the most important digital companies operating in Europe, the mandate to re-negotiate the Austrian – Irish DTA forms a key component of the plan to close tax evasion routes. The objective of these re-negotiations is to incorporate the concept of a digital/virtual permanent establishment in the double taxation agreement with Ireland in order to enable corresponding taxation of "digital" profit in Austria.
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