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UK Announces Digital Services Tax on Tech Giants (itproportal.com)

Posted by msmash on from the paying-the-price dept.

Technology giants will have to pay more tax in the UK under new regulations unveiled by the local government today. From a report: In his budget statement this afternoon, Chancellor Phillip Hammond revealed a two percent "digital services tax" on large tech firms such as Amazon, Facebook and Google. From April 2020, large social media platforms, search engines and online marketplaces will pay a 2 percent tax on the revenues they earn which are linked to UK users. The tax follows increasing pressure from both the public and politicians to take action against multi-billion dollar firms paying low rates of tax in the UK. Both Google and Facebook have been criticised for paying little taxes in previous years, largely by centering their UK operations in Ireland to avoid higher charges. Revealing the tax in Parliament, Hammond said that 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."

2 of 90 comments (clear)

  1. Shell games by Tablizer · · Score: 5, Informative

    It's becoming increasingly difficult to compute taxes for multinational corporations. Country B may not allow Country A to see enough info to compute a fair tax. It may be just easier to tax revenues instead of "profits", because money coming in and out of your own country is easier to monitor than trying to figure out what companies do and spend in other countries.

    --
    Table-ized A.I.
  2. Re:Where is their income tax usually paid to? by Anonymous Coward · · Score: 5, Insightful

    So Google makes corporate net income from ad revenue based on UK users. Presumeably pays corporate income tax on that, yes?

    Doubtful they are paying at the moment.

    Multinational corporations have gotten really good at finding places that have friendly tax laws, and having the corporation from one country pay another for the privilege of selling the product.

    It's like Hollywood accounting. Somehow, it's all very expensive and losing money hand over fist, and the profits have been laundered through several layers of corporate shells where with enough accounting bullshit none of them are profitable.

    Countries are now just starting to say "no, you made revenues in this country, you're going to pay taxes on that".

    About time I say.