• Belgium jumps on the bandwagon to tax Online Giants

Belgium jumps on the bandwagon to tax Online Giants

30 January 2019

The fair and efficient taxation of the so-called “Online Giants” (Google, Facebook, Apple and Amazon, or the “GAFAs”) continues to govern the political agendas.

Both the OECD and the EU acknowledge that international tax rules no longer suit the realities of today’s digital economy. The Online Giants make profits via their digital services whereby less physical presence is required and user contributions and intangible assets play an important role. In turn this creates a discrepancy between the place where profits are generated and the place where these profits are taxed, and as such they avoid fair and efficient taxation.

Adaptation of tax rules to the modern digital economy

Finding a comprehensive solution is proving to be very difficult, and the OECD is expecting a definitive proposal in 2020 at the earliest. At EU level, the discussion has been deadlocked for quite some time because of the diverging interests of different countries and the unanimity required for the adoption of the proposals. It is primarily those countries that house the European headquarters of the Online Giants who are against.

This impasse has impelled a number of countries (the United Kingdom, France, Austria and Spain) to take the initiative themselves.

Recently, Belgium has also jumped on the bandwagon. On 23 January 2019, two bills were submitted in the Chamber of Representatives aimed at the adequate and efficient taxation of the “Online Giants” in Belgium.


Provisional taxation of the most important digital services

The first bill aims to introduce a provisional tax at the Belgian level on the most important digital services of the “online giants”, who are currently avoiding paying any tax in the EU.

The Digital Services Tax (DST) involves a provisional tax of 3% on revenues from three main services if their greatest value is created by users:

  1. The online posting of advertising messages aimed at the users of a platform;
  2. The sale of data collected about users; and
  3. The offering of digital platforms facilitating interaction between users and the supplying of goods and services between users.

The DST predominantly targets the Online Giants. The tax targets enterprises with a total global revenue exceeding EUR 750,000,000 and a total taxable revenue in the EU of at least EUR 50,000,000.

An enterprise is liable for DST in Belgium when the user is in Belgium at the moment the taxable service is provided (localisation based on the IP address).


Harmonisation of corporation tax for digital activities

The second bill provides for an extension of the concept of “Belgian institution” to include a “significant digital presence”. This occurs when an enterprise in Belgium satisfies one or more of the following criteria:

  1. The revenue from the provision of digital services to users in a jurisdiction exceeds EUR 7 million during a financial year;
  2. The number of users in a Member State exceeds 100,000 during a financial year;
  3. The number of business agreements for the provision of digital services that are concluded by users exceeds 3,000.

Just as for the temporary taxation, the location of a user is identified using the IP address of his or her device.



Both legislative proposals will come into force on the day on which they are published in the Belgian Official Gazette. Given the current political situation, in particular the caretaker government and the upcoming federal elections in May 2019, it is doubtful that these bills will still be adopted during the current legislative term. At this time, no mention has been made of any retroactive application upon their implementation.

In any event, BDO will keep a close eye on this matter and keep you informed.



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