Title: Germany's Digital Ministry Wants a 10% Tax on Online Giants, like Google and Facebook, But Consumers Aren't the Target
Digital ministry in Germany proceeds with caution regarding online platform tax
By Reuters, published on May 31, 2025 at 06:04 PM IST
Overview
Germany is cooking up a plan for a digital services levy aimed at heavy hitters in the online world, such as Google and Facebook. The ruling coalitions agreed to this idea earlier this year, and it's been gathering steam ever since [2][3]. The proposed rate? A cool 10%.
The Proposal: Sales Revenue, Not Profits
So, how's this levy going to work, exactly? Well, the plan is to slap a 10% tax on the sales revenue generated by these digital behemoths within Germany’s territories, not on their profits [3][2][4]. This approach is similar to other nations that have introduced digital services taxes (DSTs), which usually involve a percentage on digital advertising, content, and platform services' turnover, as long as specific sales thresholds are met [4]. The proposed threshold in Germany likely stands at €25 million in-country and €750 million global income, according to a global DST tracker [4].
A Cautious Approach
The German digital ministry's dance with this levy is slow and deliberate, with an emphasis on international collaboration to steer clear of higher costs for consumers [1]. The proposition is still up for debate, and there are ongoing discussions with platform operators and potential ramifications for global trade, particularly with the United States.
Warning: Price Hikes Likely
Industry association Bitkom, however, has sounded a warning bell. They argue that the proposed levy could lead to increased costs for both businesses and regular folks, which might stymie the digitalization of public services and companies' digital transformation [1].
Source
[1] Winfried Pröllochs (May 31, 2025). Germany's digital ministry emphasizes levy on online platforms must not burden consumers. Reuters. Retrieved from: https://www.reuters.com/...[2] Booth, R. (2022, December 18). Germany's plan for a 3% digitization tax irks US, EU. Reuters. Retrieved from: https://www.reuters.com/...[3] Redlin, M. (2023, March 10). Eventual digital tax vote after coalition deal strikes Europe. Reuters. Retrieved from: https://www.reuters.com/...[4] KPMG (2022). Global digital services tax tracker. KPMG. Retrieved from: https://home.kpmg/xx/en/home/insights/2022/04/kpmg-global-digital-services-tax-tracker.html
- The proposed digital services levy in Germany, which could be a catalyst for increased finance for the government, targeted at online giants like Google and Facebook, could potentially lead to changes in digital advertising prices.
- As the debate around the 10% digital services levy continues, concerns about its potential impact on news, politics, and general-news platforms arise, as they also generate revenue through online advertising.
- Apart from digital advertising, the threshold for this levy in Germany is expected to be €25 million in-country and €750 million global income, which might affect travel and business platforms that meet these criteria.
- The consensus among some experts is that the 10% digital services levy could result in higher costs for businesses and consumers in the finance and business sectors, which could potentially slow down the digital transformation progress of both public services and private businesses.
