The UK is pushing ahead with the proposed 2 per cent levy targeting ‘large digital businesses’ next April that will net the Treasury around £400million by 2022.
Treasury minister Jesse Norman said: ‘This targeted and proportionate digital services tax is designed to keep our tax system in this area both fair and competitive, pending a longer-term international settlement.’
The ministry published the planned bill on the same day France became the first major economy to impose such a levy, after its parliament passed a law mandating a 3.0 percent tax on internet heavyweights’ annual revenues.
The move prompted a furious response from Washington as President Trump lambasted
The UK is pushing ahead with the proposed 2 per cent levy targeting ‘large digital businesses’ next April that will net the Treasury around £400million by 2022
French lawmakers passed the bill imposing a three per cent levy on revenue made inside the country.
The legislation – dubbed the GAFA tax – an acronym for Google, Apple, Facebook and Amazon – was passed by a simple show of hands in the Senate upper house after previously being passed by the National Assembly lower chamber.
The French move drew an angry response from Trump even before the legislation was passed, with the president ordering an investigation that the French economy minister said was unprecedented in the history of French-US relations.
And Trade Representative Robert Lighthizer said ‘the United States is very concerned’ about the digital services tax which ‘unfairly targets American companies’.
The United States is home to many of the world’s biggest tech companies, such as Amazon, Apple, Facebook and Google.
Other leading economies want to plug a gap that has seen many such firms pay next to nothing in tax, despite making huge profits from their consumers.
Britain backs US calls to tackle the issue by reforming international taxation rules through the Organisation for Economic Co-operation and Development (OECD) and the G20.
London has pledged to abandon its new levy once an international agreement has been reached.
Ireland, which provides the European headquarters for many of the big American tech firms, said it ‘does not comment on another country’s tax arrangements’ when asked about the French tax.
‘Ireland believes that the challenges arising from the digitalisation of the economy are best addressed by finding a sustainable globally agreed solution at OECD level,’ a finance ministry spokesman said.