Czech ruling parties agree 5% digital tax for internet giants

The two Czech ruling coalition parties agreed on Wednesday to introduce a 5% digital tax on the local revenues of global internet giants such as Amazon and Google, news wires reported, citing Labour Minister Jana Malacova.

The government of PM Andrej Babis has long planned to impose the tax on firms with global revenue over €750m ($853m) annually, 100 million crowns ($4.28m) turnover in the Czech market and more than 200,000 user accounts. It was not immediately clear if any of those parameters would change, Reuters noted. The tax agreement is still subject to parliamentary approval.

The initial plan was to impose a 7% tax on big tech companies’ local revenues from targeted advertising, digital marketplace provision and user data sales despite opposition from the US where the biggest firms are based.

The Czech Republic would follow other countries in Europe with its digital tax after the EU failed to reach a bloc-wide agreement.

The US Trade Representative's office said earlier in June the country was investigating digital services taxes being adopted or considered by Britain, Italy, Brazil and other countries, including the Czech Republic.

The Czech government has said the tax would remain in place until there is an agreement on a solution among countries in the OECD.

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