Austria calls for tax reform, sellers' profits may shrink

According to foreign media reports, the Austrian Ministry of Finance released official data on online trade for the first time. In 2020, foreign retailers in Austria achieved a turnover of 4.4 billion euros, while local Austrian suppliers only had a revenue of 1.3 billion euros.

The Ministry of Finance said that foreign online retailers and express delivery companies increased their turnover by about 30% to 4.4 billion euros, while the revenue of Austrian retailers and mail-order companies increased by only 13% to 1.3 billion euros. This means that more than 75% of Austrians' consumption went abroad.

As we all know, during the pandemic, domestic consumers bought much more goods online than before, and the number of online retailers also increased significantly, especially foreign retailers. Data shows that in 2020 alone, the number of foreign retailers and mail-order companies registered in Austria surged by 82%, reaching 9,736 by the end of the year, compared with only 5,335 in 2019.

In 2020, Austria collected a total of 944.5 million euros in VAT revenue, an increase of 22.7% over the previous year. However, 25.8% of this, or 790 million euros, went to foreign merchants.

Austrian Finance Minister Gernot Blümel expressed great dissatisfaction: Since the outbreak of the crisis, some foreign retail companies have earned high revenues in Austria, but compared with domestic retailers, they have paid very little tax, which has led to unfair domestic trade and put domestic merchants at a disadvantage. Therefore, "fair taxation" of multinational companies is a top priority.

In addition, the Austrian Trade Association also criticized the unequal tax treatment and pointed out the unfairness of all regulatory levels. They said: Austrian local merchants have to bear a lot of compulsory taxation costs and high wage costs, which has led to a large reduction in advertising budgets and less funds available for investment in digital business models, which is unparalleled anywhere in Europe.

Recently, the US government has just issued a regulation on the global corporate minimum tax rate of 21%. This topic is also being hotly discussed in Europe. The German and French governments have expressed their support for the US government's initiative, which has given the Austrian government hope. Finance Minister Blümel said: We expect to reach an agreement by the middle of this year.

The GPA union has also called for tax reforms at the national level. "We are pleased that Finance Minister Blümel no longer wants to watch this unfair game and is pushing for fair taxation of international companies," trade chief Rainer Trefelik said in a statement. "It is absolutely right to fight for a global solution."

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