UK to tax internet giants
30 October 2018 | 0
The UK is to introduce a 2% tax on technology giants such as Amazon, Facebook and Google, from 2020 that will target revenues earned in the United Kingdom, according to plans outlined by the Chancellor of the Exchequer, Philip Hammond, in the budget statement.
The Chancellor said the tax was not a sales tax that would impact consumers and would only be levied on those companies generating more than £500 million (€562 million) a year globally, but would be applicable irrespective of whether the entities have a taxable UK presence.
“We will consult on the detail to make sure we get it right,” said Hammond, “and to ensure that the UK continues to be the best place to start and scale-up a tech business.”
Hammond was keen to emphasise the specific focus of the tax, and that it would not impact smaller companies.
“This will be a narrowly-targeted tax on the UK-generated revenues of specific digital platform business models. It will be carefully designed to ensure it is established tech giants — rather than our tech start-ups — that shoulder the burden of this new tax,” said Hammond.
The tax, or similar measures, has been discussed in various forums around the world for some time, but there has been little agreement in how to apply such a measure, or to whom. Hammond’s comments suggest a level of frustration at the lack of progress.
“The UK has been leading attempts to deliver international corporate tax reform for the digital age. A new global agreement is the best long-term solution. But progress is painfully slow. We cannot simply talk forever,” he said.