German digital ministry treads cautiously over online platform levy

BERLIN (Reuters) -Germany's new digital ministry said any levy on online platforms would have to be internationally coordinated and not result in higher prices for end consumers, in a sign on Friday of possible divisions within government over plans for such a tax.

The Minister of State for Culture Wolfram Weimer had said in an interview published on Thursday that officials were working on a levy which would hit platforms such as Alphabet's Google and Meta's Facebook.

A levy of 10% would be reasonable, he said - without specifying if this were a tax on revenue or profit.

Germany's ruling parties agreed earlier this year to consider the introduction of a digital services levy, but this was not on the list of projects the coalition wants to prioritise.

Weimer's proposal had not yet been agreed upon by the government, officials had said.

"The decisive factors in evaluating such a levy are that it is designed in a targeted manner, is internationally coordinated and compatible with EU law, that any potential revenue benefits Germany as a hub for innovation, and that ultimately no higher prices are passed on to end consumers," a spokesperson for the digital ministry said.

The proposal comes as Chancellor Friedrich Merz is expected to travel to Washington soon to meet with U.S. President Donald Trump, although a trip has not yet been officially announced. Trump has in the past said he will not allow foreign governments to "appropriate America's tax base for their own benefit".

Industry association Bitkom warned that the levy could lead to price increases that would impact businesses, public administrations, and consumers.

"These price increases will hinder and slow down the urgently needed acceleration of the digitalization of public services and the digital transformation of companies," said Bitkom President Ralf Wintergerst. "What we need is not more, but fewer financial burdens on digital goods and services."

(Reporting by Andreas Rinke; Additional Reporting by Christoph Steitz and Sarah Marsh;Editing by Elaine Hardcastle)

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