UK Launches Digital Tax On April 1st, Tailored For US Giants
The British government has confirmed that the digital tax will be levied on April 1, 2020. This time, the British digital tax has a very high threshold. It applies to companies with global sales of more than 500 million pounds and at least 25 million pounds from British users. For UK users' income, the tax rate is 2%, and the first £ 25 million earned from the UK is tax-free. It can be said that it is tailored specifically for GAFA (Google, Amazon, Facebook, Apple) and other "Irish Sandwiches", but it is tailor-made for American Internet giants who do not pay taxes in the UK. If the threshold is not reached at all, it does not matter if you pay taxes. The UK's Revenue and Customs Authority (HMRC) believes that by the end of fiscal 2025, this tax could generate up to 515 million pounds (about 665 million dollars) in additional annual revenue. Digital tax refers to the state's taxation of digital services sold by multinational companies within a country through overseas subsidiaries. This new tax is different from the corporate income tax already paid by many companies, and is widely known as a digital tax, sometimes called a "digital service tax." At present, more than thirty countries have collected digital taxes through different forms. The British approach is to tax the operating income of digital enterprises in full, similar to the current practice of withholding income tax. This method is mainly used in EU countries. Of course, Britain is no longer considered.