LONDON (Pakistan Point News / Sputnik - 30th October, 2018) The United Kingdom intends to introduce a new 2 percent tax on revenues of digital platform businesses with at least 500 million Pounds ($640 million) in annual global revenues, UK Chancellor of the Exchequer Philip Hammond said on Monday.
"We will now introduce a UK Digital Services Tax. This will be a narrowly-targeted tax on the UK-generated revenues of specific digital platform business models ... The Digital Services Tax will only be paid by companies which are profitable and which generate at least �500m a year in global revenues in the business lines in scope," Hammond said, delivering a budget speech.
The UK Digital Services Tax "will be carefully designed to ensure" that it only concerns "established tech giants," rather than national tech start-ups, according to Hammond.
The tax, which is estimated to raise over 400 million pounds annually ($512 million), will enter into force in April 2020.
Hammond also pledged to continue working with the member states of the Organization for Economic Co-operation and Development (OECD) and the Group of G20 to agree upon an international corporate tax reform.
Currently, global tech giants pay income tax in jurisdictions that have significantly smaller taxes in place, something that has repeatedly been criticized by EU countries.
