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posted by takyon on Wednesday October 31 2018, @01:11PM   Printer-friendly
from the render-unto-Caesar dept.

Budget 2018: UK goes it alone on digital sales tax for tech giants

UK chancellor Philip Hammond has used today's budget to take aim at tech giants who he says aren't paying their fair share of tax in the nation and is promising to introduce a digital sales levy in 2020 to rectify this.

[...] Hammond said that, as the UK evolves for a digital age, "so too must our tax system to ensure it remains fair and robust" – with the key announcement being on digital tax for tech giants. "There is one standout example of where the rules of the game must evolve now if they are to keep up with the emerging digital economy," Hammond said: digital platforms delivering search engines, social media and online marketplaces. Tax rules have "simply not kept pace with changing business models", he said, adding that it as "clearly not sustainable or fair that digital platforms businesses can generate substantial value in the UK without paying tax here". As such, the UK will, in April 2020, introduce a digital services tax on search engines, social media platforms and online marketplaces.

[...] The move comes as the OECD is trying to thrash out a global agreement on digital sales tax. Hammond – who hinted that the UK might go it alone earlier this month – said a global deal would be the ideal long-term solution, but that progress had been "painfully slow" and that "we cannot simply talk forever". EU member states are also pressing for an interim deal as the OECD deliberates.

The government said it will not be a "generalised tax on online advertising or the collection of data" – and will put a levy of 2 per cent on the revenues that can be attributed to the business models linked to UK-based users.

Companies with global revenue over 500 million pounds will have their local revenue taxed at 2%. I strongly oppose taxing any company's gross revenue. Profit taxes are reasonable, but there are lots of companies that have very thin margins.

Also at The Guardian, FT, The Washington Post, The Hill, MIT, and WSJ.


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  • (Score: 2, Insightful) by Anonymous Coward on Wednesday October 31 2018, @11:59PM

    by Anonymous Coward on Wednesday October 31 2018, @11:59PM (#756247)

    Business don't pay tax on expenditures*, only and what they claim to be profit.

    And that is the reason UK is doing this, business are playing all kind of tricks to say their profit is 0% in UK. And then magically it is >0% in some other place, generated by the UK (among other countries) activity.

    *: otherwise physical persons that spend nearly everything would not pay any income tax, no matter how big their income, only for the small amount that is left (savings).

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