UK to introduce digital tax

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UK follows France to introduce digital services tax The UK has published draft legislation for a digital services tax to be included in its next finance bill. The tax will consist of a 2% levy on companies with digital revenue of more than £500m, when more than £25m of this revenue is earned from UK users and is expected to raise £400m for the exchequer each year by 2021. The move will hit tech giants such as Facebook, Amazon and Google and comes just hours after the US reacted angrily to French moves to introduce a similar levy. The French plan will apply a 3% charge on turnover to companies with revenues of more than €750m globally and €25m in France – the same model as a draft EU digital services tax which has failed to progress. President Donald Trump responded by ordering trade representative Robert Lighthizer to conduct an investigation into whether the tax unfairly targets US companies. An FT opinion piece says the taxes are well warranted and designed to spur the final goal of a multilateral accord to ensure Big Tech pays fair taxes globally. Ahead of a meeting of finance chiefs in Paris, France’s finance minister Bruno Le Maire has urged the G7 economies to reach a deal over a global minimum corporate tax rate, a move he said would “give a very important impetus for a decision at the OECD.” Mr Le Maire said if an agreement in principle can be secure Paris would withdraw its own tax on digital giants.

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