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David Paul Morris | Bloomberg | Getty Images
Sundar Pichai, Chief Executive Officer of Google Inc., speaks at the Google I / O Developer Conference in Mountain View, California, USA on Tuesday, May 8, 2018.
Britain said it would tax revenues generated by online platforms such as Google, Facebook and Amazon in the country to update a system that had not kept pace with the evolution of numerical economic models.
"It's clearly neither sustainable nor fair that digital platform companies can generate substantial value in the UK without paying taxes here," said Finance Minister Philip Hammond in his speech. on the annual budget, Monday.
The tax will aim to ensure that established technology giants, rather than start-up companies, bear the brunt, Hammond said, and "will apply to search engines, social media platforms and social media. online markets derive significant value from the participation of their users, "reads the proposal.
The tax will be paid by companies that generate at least 500 million pounds of global revenue a year, leaving companies like Facebook, Google and Amazon directly in the crosshairs.
The Treasury said profitable businesses would be taxed at 2% on revenue generated by UK users as of April 2020, and that this measure should yield more than 400 million pounds ($ 512 million) annually. .
Britain has been leading attempts to reform the international corporate tax systems, Hammond said, but progress has been painfully slow and governments simply can not talk forever.
Dan Neidle, Clifford Chance's tax partner, said the radical nature of the proposal made it clear that Britain was beginning to be frustrated by the slow pace of changes to global tax laws.
"The United Kingdom is ahead of all other countries except Spain," he said.
But given the dominance of US tech giants, the administration of President Donald Trump may not appreciate this proposal at a time when Britain is trying to enter into new trade deals.
Hammond said that if a global solution emerged, she would consider adopting it instead of her tax.
But in the meantime, the government will look at the details to make sure it gets it right, and then ensure that Britain remains one of the best places to start and grow a technology company.
Amazon and Facebook declined to comment.
Sara Salinas of CNBC contributed to this report.
