Germany Reportedly Mulling Special Tax on Foreign Internet Firms

Germany's finance ministry is looking into the possibility of a 15 percent special tax on online advertising revenue collected by foreign Internet companies such as Google or Facebook from German operators, Wirtschaftswoche magazine reported on Friday.

The ministry was in the early stage of studying such a move, the weekly publication added.

This move could entail treating payments for online advertisements in the same way as licence fee payments, which would make the German companies subject to withholding tax being deducted.

The German companies, which choose to place online advertisements, will have to recover this withholding tax from the Internet firms as the revenue would be their original tax liability, the report said.

The detour via German customers would be necessary because the tax system has no access to platform operators based abroad.

The finance ministry had confirmed the plans, but stressed there was no agreement on how to proceed between federal finance authorities and individual states, the magazine reported.

Meanwhile, the European Union is set to rewrite its two-decades-old copyright rules which will force Alphabet's Google and Facebook to share revenue with the creative industries and remove copyright-protected content on YouTube or Instagram.

Negotiators from the EU countries, the European Parliament and the European Commission clinched a deal on Wednesday after day-long negotiations.

The commission, the EU's executive body, launched the debate two years ago, saying the rules needed to be overhauled to protect the bloc's cultural heritage and make sure that publishers, broadcasters and artists are remunerated fairly.

© Thomson Reuters 2019