UK Says Digital Tax On US Big Techs Like Facebook, Amazon And Google Stays

Officials in the United Kingdom have denied a published report that the U.K. is planning to end a tax on U.S. digital companies.

Over the weekend, the Daily Mirror broke the story that the four-month-old Digital Services Tax (DST) directed at FacebookAmazon and Google to help pay for expenses related to COVID-19 will end amid opposition from the Trump administration.

Chancellor Rishi Sunak reportedly told a source that ending the tax was a way to resume negotiations on a trade deal and angering the president is “more trouble than it’s worth,” according to The Daily Mirror.

But CNBC reported Monday (Aug. 24) that despite pressure from the U.S. the DST will only go away once there is a global agreement on how the giant digital companies should be taxed.

A spokesperson for Her Majesty’s Treasury, the government agency responsible for economic policy, told CNBC, “We’ve been clear it’s a temporary tax that will be removed once an appropriate global solution is in place and we continue to work with our international partners to reach that goal.”

The tax is levied against companies whose annual worldwide revenues from digital services exceed £500 million ($654.2 million). Of that number, more than £25 million ($32.7 million) must be from users in the U.K.

Treasury Secretary Steven Mnuchin has said he is against the levy.

“The United States remains opposed to digital services taxes and similar unilateral measures,” he said. “As we have repeatedly said, if countries choose to collect or adopt such taxes, the United States will respond with appropriate commensurate measures.”

In June, the U.S. withdrew from the negotiations after being unable to agree on changes to global taxation law that would impact the major U.S. digital companies, the network reported.

Last fall, the European Commission, the executive branch of the European Union (EU) responsible for legislation, said the 28-nation bloc should come to an agreement on a digital tax if a global agreement is not reached by the close of 2020.

“If no effective agreement can be reached by the end of 2020, the EU should be willing to act alone,” said Margrethe Vestager, the panel’s vice president.



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