To Tax, or not to Tax - that is the question

There was an article published in the European Commiission's 'Joinup' news site entitled "Greek advocacy protests hospital's banning of open source".  The story caught my attention because it provided an interesting twist on how one government may choose to treat companies using free and open source software (FOSS)  -  charge them with tax evasion!

This story provides an interesting new twist on the use of free and open source software (FOSS). Are hospitals and companies using 'open source' software evading tax laws? They're using something of tremendous value that is available for free. That's got to be unacceptable to tax authorities within some cash strapped governments. The solution - let's start taxing free and open access text books, open data, open source software, open knowledge, open science, open...  Makes tremendous sense, or does it?

It appears that the Greek government's Financial & Economic Crime Unit has begun approaching companies and public administrations, asking for an inventory of their software licenses along with any corresponding invoices. The aim of the economic crime unit is to combat tax evasion.  Apparently, since free and open source software (FOSS) doesn't come with an invoice, the presumption is that somehow these hospitals or companies may be charged with tax evasion.

Eel/lak, a Greek network of academic proponents of open source, is asking a hospital in Thessaloniki to reconsider its ban of software solutions based on free and open source software. They claim the hospital is misreading the implications of the government's inventory of software licenses being used by private companies and public institutions.  Eel/lak claims the hospital's ban on the use of open source software "has no legal basis, is not based on any government decision and creates unnecessary costs for the Greek taxpayer in a particularly difficult period for the entire Greek community."

Is this a hint of things to come? A new wave of attacks on free and open source software (FOSS) and related 'open solutions'  by the government with the 'behind the scenes' approval of private sector companies theatened by the growing global 'open movement'. 

To Tax, or not to Tax – that is the question. Share you constructive thoughts on the subject with our readers.


Dept. of Revenue [Excerpt]

Dept. of Revenue [Excerpt] Clarifies Open Source Software Tax

  1. How does the new tax apply to use of Open Source software?

A. Open Source software is available free on the Internet. Thus, no tax applies to the transfer of Open Source software where there is no consideration for the transfer. If a seller customizes Open Source software and sells it to one or more customers to be used on any electronic device, that customized software is subject to tax.

The use of open source, or free on the internet, software can be taxed, only if modified or customized, see questions 10 and 11:


Gijs Hillenius & Joinup

Our thanks to Gijs Hillenius for submitting this article for publication this week in Joinup, a news platform established by the European Commission on behalf of the European Union (EU) to share experiences related to e-Government and interoperability solutions. Joinup offers relevant content and insight in various areas of interest including: • Pan-European e-Government public services; • Legal information on usage and development of open-source software within the public sector; • Impact of EU regulations and actions on interoperability solutions.