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A man walks past the Facebook logo at the company's headquarters in London. The U.K. plans a new tax targeting broad technology companies.
Photo:
Dominic Lipinski / Zuma Press
LONDON-The U.K. will introduce a new tax that targets broad technology companies, starting in 2020, Philip Hammond said treasury chief on Monday, the country's economic development.
The announcement comes from countries that are contemplating new levies
Alphabet
Inc.
GOOGL -2.20%
and
Facebook
Inc.
FB -0.87%
from units based beyond their borders as economic activity shifts online.
"It's clearly not sustainable, or fair, that digital platform businesses can generate substantial value in the U.K.," said Mr. Hammond told lawmakers during his presentation of the annual budget.
It is expected to be at least $ 500 million a year in total revenues, and it is expected to raise £ 400 million annually.
The U.K. first set out its justification for a new tax in November 2017, arguing users of digital services help make the product that companies sell to advertisers and other customers. That principle has influenced the rest of the European Union, which is working on its own tax proposal.
Since launching an effort to overhaul the system for taxing companies that have become more widely available in 2013, developed-countries governments have been divided on -based response. The Organization for Economic Cooperation and Development, which has been compromised by 2020.
Mr. Hammond said that while a global agreement "is the best long-term solution," progress has been "painfully slow."
"We can not just talk forever," he said.
Write to Paul Hannon at [email protected]
