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(Bloomberg) – The United Kingdom has joined a growing number of countries that say to great minds: It's time to pay.
British Finance Minister Philip Hammond on Tuesday announced a tax on the world's largest Internet companies as of April 2020. This tax, which will generate £ 400 million (US $ 510 million) year, will affect search engines, social networks and online markets that are profitable and bring in annual sales of at least 500 million pounds.
Facebook, Google and even Amazon can absorb the shock, but they may have trouble badimilating the flow of taxes beyond the United Kingdom. Regulators and cities are becoming more daring when it comes to asking technology companies to donate some of their profits. The coordination of a global tax system is no longer a priority.
"There is no global consensus," said Paul Miller, tax partner at law firm Ashurst. "Many countries say" enough, that's enough, we can not wait for an international agreement on this issue "". It was not possible to contact Facebook representatives for their impressions. A Google spokesman declined to comment.
Europe is considering new digital tax policies that would be applied in the 27 bloc countries. Countries like South Korea, Singapore and Australia offer their own strategies.
Hammond states that the United Kingdom will continue to work with the Organization for Economic Co-operation and Development and the G20 to seek a comprehensive solution. it could be adopted instead of the tax at the local level.
However, the EU is also pressing for urgent measures to be taken during the development of a comprehensive solution. The European Commission, the bloc's executive body, is asking for a 3% interim tax on revenues from areas such as advertising and digital data, which would be applied to technology companies making sales of at least 750 millions of euros (852 million USD). Unlike Great Britain, this would apply to these companies, whether they are profitable or not.
The Tax Proposals require the unanimous approval of the EU members before becoming law and some countries do not agree with certain details. Despite this, Austria, which holds the rotating presidency of the European Union, is still seeking agreement on the tax ahead of the Finance Ministers' meeting to be held in December.
To technology companies, big and small, they do not like this subject. In a letter recently sent to EU finance ministers, the leaders of some of the most successful technology companies in Europe, such as Spotify, Supercell and Zalando, have urged the bloc not to pbad the tax.
innovation and investment, especially for emerging companies. The tax "would deprive these same companies of an essential source of capital to reinvest in their growth, weakening their ability to compete globally," wrote leaders.
In Asia, governments send a similar message. Singapore aims to tax digital services starting in 2020 and treat global technology giants such as Netflix and Spotify as they do with local providers. In South Korea, video games, entertainment content and software are subject to a value-added tax.
Last year, Australia introduced a deviated income tax, which targets multinational corporations that transfer their national income to other countries. Companies with global sales in excess of A $ 1 billion (US $ 711 million) and a turnover of at least US $ 25 million in Australia pay a 40% tariff.
Original note: Beyond the UK, Google, Facebook and Amazon Tax Tide
– With the collaboration of Robert Fenner
Reporters in the original story: Nate Lanxon to London, [email protected], Natalia Drozdiak in Brussels, [email protected], Jeremy Kahn in London, [email protected]
Editors responsible for the original story: Giles Turner, [email protected] , Alistair Barr
For more articles of this kind, visit bloomberg.com
© 2018 Bloomberg LP [19659019]
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