According to recent reports, Andreas Schieder of the Social Democratic Party of Austria has put forward a plan to deal with aggressive tax practices of MNEs operating in the digital economy. The plan includes proposals to extend Austrian tax on advertising revenue to digital formats, to tax purely digital services that are acquired by Austrian customers from companies with no physical presence in the country, and most interestingly, to subject free online services to VAT, such as those provided by Facebook, Google, Twitter, etc. The rational for subjecting free services to VAT is that the use of the free services...