Slovakia tries to tax foreign digital platforms
Slovakia is one of the first countries to try to tax foreign digital economy firms such as AirBnB and Booking.com. By law, these companies were obliged to register to pay income taxes in Slovakia as of January this year, but just one company, Czech TPF Group, has registered. The tax authority FS has therefore begun registering them involuntarily. It has already registered the first firm, Swiss Expedia Lodging Partner Services, and is in the process of registering Booking.com, HRS, Previo, and Szallas.hu.
The companies are protesting the registration, arguing that the Slovak solution, without coordination with other countries, will result in double taxation and violation of double taxation treaties. This will result in lawsuits and arbitrations.
Unclear legislation also makes life complicated for Slovak companies. If a foreign digital platform does not register in Slovakia, their Slovak partners must pay withholding tax and claim it from those firms. This is tricky.