Estonia to Tax Paid Streaming Platforms Following EU Directive

Estonia is gearing up to implement a new tax on major streaming platforms like Netflix and Disney, in line with a directive from the European Union. The goal is to use the revenue from these taxes to support locally produced content, especially in languages other than English.

The Reform-Eesti 200 coalition agreement has a plan in place to start taxing international platforms by the third quarter of this year. While the EU’s Audiovisual Services Directive has already been adopted in Estonia, the actual implementation is still on the horizon.

This new tax levy will be initially imposed only on paid platforms, with free streaming services like ERR’s Jupiter being exempt. According to Karlo Funk, an advisor at the Ministry of Culture, paid platforms will have two choices under this new tax system. They can either invest in local production or face a tax based on the revenue they generate from the local market.

Edith Sepp, the head of the Estonian Film Institute, explained that Article 13, which enables this levy, is in the process of being amended. While the exact amounts of revenue are not known yet, Funk estimates that it could range between €700,000 and €1.2 million, with a focus on investing back into content.

The impact of this tax in Estonia may not be significant financially, but it carries symbolic importance. Sepp emphasized the importance of supporting Estonian-language content, especially if international platforms are accessing the local market.

Overall, this move aligns with the European Audiovisual Media Services Directive, which aims to provide support for European films and series by imposing obligations or levies on streaming platforms. Currently, 17 EU states are already taxing larger paid streaming platforms to boost local film production.