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UK presses ahead with Digital Sales Tax plans

Friday 12 July 2019 | 11:29 CET | News

The UK Government is pushing ahead with plans for a digital sales tax by publishing draft legislation to introduce a new Digital Services Tax from April 2020. It has also published responses to its consultation on the proposed tax.

The new Digital Services Tax will target large multi-national organisations generating revenue from the provision of a search engine, social media platform or online marketplace. From April 2020, a new 2 percent tax will be imposed on revenues generated from UK users. The aim of this new policy is to correct the current the tax framework which does not take into account the value businesses derive from users when allocating profits between different countries.

The government will introduce legislation in Finance Bill 2019-2020 to establish the Digital Sales Tax. Affected businesses will be liable when the group's worldwide revenues from the digital activities are more than GBP 500 million and more than GBP 25 million of these revenues are generated from UK users. The Digital Sales Tax will be payable and reportable on an annual basis. 

The UK Government still believes that reform of international corporate tax laws is the most sustainable solution in the long term, and is prepared to dis-apply this Digital Sales Tax if the G7, G20 and OECD can agree an appropriate international solution. 

 



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Categories: Internet
Countries: United Kingdom
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