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UK sticks to digital tax in April

January 22, 2020

UK Chancellor Sajid Javid has told the Davos meeting he will not back down over the introduction of a new sales tax on large US tech firms. The US threatened it would consider retaliatory tariffs on UK car makers if the measure goes ahead.

The new tax is aimed at firms that do a lot of business in the UK but don’t pay taxes based on the size of their sales, including Google, Amazon and Facebook. Proposed is a 2 per cent sales tax that will be removed if and when a global solution to taxing ‘no fixed abode’ digitals is reached.

However, France this week agreed to suspend a similar measure for fear of US sanctions.

Javid said that while the UK would like to see an international agreement, he planned to go ahead with the introduction of the new tax.

The US argues that American tech giants are being unfairly targeted and has called for governments to wait for an international agreement.Treasury Secretary Steve Mnuchin, said “We think the digital tax is discriminatory in nature… if people want to arbitrarily put taxes on our digital companies we’ll consider arbitrarily putting taxes on car companies.”

The Organisation for Economic Cooperation and Development (OECD), which is overseeing efforts to find a joint solution, has also urged national governments to wait for a multilateral agreement.

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