Britain has 'bad news' for Amazon, Facebook and Google
Britain said it would tax the revenue that online platforms such as Amazon, Facebook and Google make in the country to update a system that had not maintained pace with varying digital business models
Britain said it would tax the revenue that online platforms such as Amazon, Facebook and Google make in the country to update a system that had not maintained pace with varying digital business models.
On Monday Finance minister Philip Hammond told in his annual budget speech,"It's clearly not sustainable, or fair, that digital platform businesses can generate substantial value in the UK without paying tax here in respect of that business," He also said it will be paid by companies that make minimum 500 million pounds a year in global revenue.
The tax will be calculated to ensure that the established tech giants shoulder the burden, instead of the start-ups, Hammond said parliament.
The Treasury told from April 2020 the profitable companies would be taxed at the rate of 2 per cent on the money they generate from UK users, and the measure was expected to raise more than 400 million pounds ($512 million) a year. The tax will be based on self-assessment declared by the companies.
Established internet companies, which claim they follow tax rules, had previously paid little tax in Europe, usually by channelling sales through countries such as Ireland and Luxembourg which have very low tax regimes.
Both Google and Facebook have changed the way they account for their activities in Britain.
In 2016, Facebook starting recording revenue from its UK customers supported by local sales teams, and subjecting any taxable profit on the income to UK corporation tax.
However, a number of offsets meant Facebook had a tax charge for 2016 in Britain of 5.1 million pounds compared to 4.2 million pounds for 2015.