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Span now has a tax on digital services effecting various startups and fintechs

Four years have passed since the Canon AEDE. At the time that tax on digital media generated much controversy and ended, among other things, with the closure of Google News in Spain. Today, government spokeswoman Isabel Celaá has announced the approval of the ‘Google tax’, a term that was already used in the past and now takes on new relevance.

This new tax does not look like the old one, although it will be applied in those big companies that, like Google, are related to the world of digital services. This is how the new tax approved by the government of Spain works, a tribute that is expected to raise about 1,200 million euros.

What is the new ‘Google rate’?

The new tax falls within the bills on financial transactions and certain digital services. Specifically, what is called by the Government itself as ‘Google rate’ is a tax that aims to tax technology companies whose activities escape the current fiscal framework and try to make these companies tax where they generate profits.

This is a measure that the Spanish government is implementing for the first time in the European Union, although other governments such as the French and the British have also announced that they were going to carry out. Not so the EU itself, who for lack of consensus has decided to postpone this measure.

Which companies are subject to the application of this tax? Mainly large companies, since it will not affect either SMEs or startups. The application of this tax is intended for those companies with an income in Spain of more than 3 million euros and with a total annual income of at least 750 million euros. Some of the companies that would meet these requirements would be highly recognized technologies such as Google or Amazon, but also Uber, Booking or Airbnb.

Companies that are subject to these conditions must pay 3% of online advertising services, online brokerage services and the sale of data generated from the information of users.

In case the companies do not carry out the appropriate taxation, the Treasury will fine them with a fixed fine of 150 euros for each access in which said place has been falsified or hidden, with a maximum of 0.5% of the net amount of the turnover of the previous calendar year.

Activities exempt from the ‘Google rate’

What activities are exempt from paying this tax? Those based on the sale of products or services, sales of services contracted through the Internet and certain financial services. This is described in article 6 of the bill published by hacienda:

The sales of goods or services contracted online through the website of the supplier of those goods or services, in which the supplier does not act as an intermediary. The deliveries of goods or services of underlying services that take place between the users, within the framework of an online intermediation service.

The provision of online intermediation services, when the sole or main purpose of such services provided by the entity that performs the provision of a digital interface is to provide digital content to users or provide communication services or payment services . The provision of data transmission services, when they are carried out by a trading center, a systematic internaliser or a provider of a regulated participative financing service.

In parallel, the Council of Ministers has approved the so-called ‘Robin rate’. This is a tax that will be taxed with 0.2% those operations of purchase of Spanish shares in listed companies for a market capitalization of more than 1,000 million euros. The two rates will come into force three months after its publication in the Official Gazette, so we will have to wait for it to appear in the official gazette.

Published inAppsCloudE-commerceFintechStartupsTechnology

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