The Estonian Ministry of Culture is moving ahead with plans to tax streaming platforms, as required by an EU directive and written into the coalition agreement. The tax is expected to raise between €700,000 and €1.5 million per year for the state budget.
If streaming platforms are to be taxed in Estonia, it will not only affect international ones, such as Netflix, but also local Estonian platforms. However, ERR's streaming platform Jupiter, the National Archives of Estonia and Estonian Film Institute's online platform Arkaader will all avoid taxation.
"The law, or the EU 's Audio Visual Media Services Directive, allows international platforms to be taxed only if local ones are too. (However), there are differences in terms of the size and turnovers of (the different) companies and it is not the case for companies with a turnover of less than €2 million. Secondly, the whole point of the directive is to receive additional contributions for works, which contribute to (the promotion and development of) European identity from platforms that do not contribute to that but generate revenue from those same territories," explained Karlo Funk, audiovisual and digital culture adviser at the Estonian Ministry of Culture.
"For example, ERR produces a lot of its own content. As a TV channel, it has this obligation in any case. The smaller platforms are simply below the turnover threshold," Funk said.
Exactly how the tax money from Netflix and other platforms could be channeled into developing Estonian audiovisual culture is not yet clear. "This will only become clear during negotiations with all parties involved. In Estonia, it concerns Telia, one of Elisa's hubs, Netflix and the other platforms, which we are able to connect to: Amazon Prime and Disney," Funk said.
Funk is not concerned that streaming giants like Netflix will cease their activities in Estonia due to taxation. As there have been no issues in other EU countries, where the tax is already in place, he believes there is no reason why Estonia should prove to be an exception.
The law is already in force in 13 other EU countries. "Netflix has said that in a number of regions the tax is working more or less okay for them. There's not a lot of controversy around it," Funk said. Together, the streaming platforms operating in Estonia are expected to add between €700,000 and €1.5 million in tax revenue a year to the Estonian state budget.
The Ministry of Culture plans to move forward with the law this year, with an amendment set to be made to the Media Services Act. Further details are expected to become clear in due course.
Editor: Michael Cole