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UK announces 2% digital tax on Facebook, Google, Amazon

Date: 2020-03-12

The UK says the tax could affect "large-scale multinational companies that generate revenue from social media services, search engines or online markets to British users," with Facebook, Google and Amazon the key.


On March 12, according to foreign media reports, the British government confirmed that it would levy a digital service tax and levy a 2% tax on the online income of companies such as Facebook, Google and Amazon in the UK.

The British government has confirmed that the tax will be levied on April 1, 2020.

The UK's Revenue and Customs Service (HMRC) believes that by the end of the fiscal year ending in 2025, this tax could generate up to 515 million pounds (about 665 million dollars) in additional annual revenue.

The department explained that the tax could affect "income from large multinational companies that provide social media services, search engines or online markets to UK users."

The key will be Facebook, Google and Amazon. American companies are often criticized for the huge amount of income they generate in the UK, paying very little tax.

Apple and others are expanding into digital services, including entertainment streaming and credit cards, which could also be affected. But Apple ’s core revenue in the UK comes from sales of consumer devices, which will not be affected by taxes.

The Trump administration has previously threatened tariffs on billions of dollars in French products in retaliation for similar taxes in France.

Taxes in France are higher than in the United Kingdom, which requires companies with global sales of more than 750 million euros and domestic sales of more than 25.99 million euros to pay 3%.

In the UK, this tax will only apply to: company revenues of more than 500 million pounds (about $ 645 million), of which UK users generate more than 25 million pounds (about 32.26 million).

But these two conditions certainly include Facebook, Google and Amazon, which have billions of dollars in annual revenue.

The United States has claimed that attempts to tax these internet giants are discriminatory against U.S. companies, so the United States has reason to take a harsh tariff response.

The United States has not responded to the UK's tax plan.