Tech firms that rely on online networks to face new taxes in UK

The UK Treasury announced plans in March 2018 to change the way it taxes big tech firms that operate online.
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Just a week after news broke that the EU plans to tax the local turnover of big tech firms, the UK government released a position paper stating its intention to similarly revamp how it taxes these corporations.

Britain’s Treasury stated on 13 March 2018 that big tech firms that operate as digital platforms — Facebook, Amazon, Apple and Google — should be taxed in a way that reflects where their user base is located. The Telegraph reports that Chancellor Philip Hammond intends to lobby for such a change at an upcoming meeting of G20 finance ministers but has also expressed an interest in instituting an interim turnover tax in the UK as a stop-gap measure against the tax avoidance practices of multinational tech firms.

The position paper published by the Treasury specifically addresses the practices of firms that it refers to as ‘online networks,’ or those whose operations rely on the online activity of their users around the world to generate revenue and profits. In addition to the big tech firms targeted by the EU, the UK’s position paper also implicates Twitter, Uber and companies like Spotify.

The moves in the UK and the EU are meant to close the gap between existing corporation tax policies and how digital multinational firms actually operate.

Source: Tech giants face higher UK taxes as Treasury prepares crackdown