The British government is planning a digital tax for Internet companies like Google, Facebook and Amazon. It was unsustainable and unfair that online platforms in the UK would generate significant sums of money without paying taxes, said Finance Secretary Philip Hammond in parliament's annual budget debate.
As of April 2020, it is planned that profitable companies will pay a two percent tax on money earned by UK users. The tax should therefore come just at a time when the United Kingdom wants to close after Brexit new trade agreement with the United States.
Big corporations are supposed to pay the most taxes
The new tax would be designed so that established technology companies would have to bear the tax burden rather than start-up companies, said Hammond. This should apply to corporations that generate sales of at least 500 million pounds (around 560 million euros) worldwide. Specifically, this affects search engines, social media and online merchants. The Ministry of Finance expects to receive 400 million pounds (just under 450 million euros) a year.
Since US taxpayers are likely to be affected by the new tax, US President Donald Trump's plans are unlikely to thrill. The EU is also discussing a digital tax. In protest, however, the US Republicans and Democrats were in agreement: This discriminate against US companies, wrote politicians of both camps in a joint open letter.