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UK to review digital tax policy levied on American technology firms

UK to review digital tax policy levied on American technology firms
UK to review digital tax policy levied on American technology firms
  • A 2% digital tax was to be levied on prominent technology companies like Amazon, Google, and Facebook
  • In return to the policy strategy by Britain, the U.S. officials have cautioned of tax on automobile manufacturers

U.K. has reportedly announced that it would consider reviewing its proposal to levy a digital tax on leading technology companies such as Amazon, Facebook, and Google. The review is a part of its efforts to ink a free trade deal with the U.S.

Reportedly, starting next month a 2% tax was to be imposed on the revenue made by leading technology firms from British consumers. The approach has been strongly opposed by Washington, calling the digital tax inappropriate and discriminatory.

For the record, in January, Steven Mnuchin, U.S. Treasury Secretary, had notified that the nation would oppose any major step taken towards imposing a tax on global technology leaders.

He further states that in lieu of the taxation on American digital companies, the U.S. will consider imposing taxes on automobile manufacturing companies.

Sajid Javid, UK’s ex-finance minister was reportedly quoted stating that, the digital tax is a temporary, fair tax and will be removed after there is an international solution.

Seemingly, the UK is working towards finding a global solution to address the issues related to the taxing of digital firms.

As per reliable sources, the Organization for Economic Cooperation and Development (OECD) is focusing on developing international regulations to make technology companies pay tax in areas where they carry out business instead of where their subsidiaries are registered. The association aims at agreeing on the technical details of the tax by July.

Earlier, France had plans of introducing a similar digital tax system however, later the country decided to shelve the policy after the U.S. threatened to levy taxes on French wine.

Citing reports, Britain may provide additional details regarding the taxation strategy during the Financial Budget which will be presented by the new Finance Minister- Rishi Sunak on the 11 March 2020.

 

Source Credits: https://www.nasdaq.com/articles/uk-to-consider-opposition-to-digital-tax-in-pursuit-of-u.s.-trade-deal-2020-03-02

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Vinisha Joshi

Despite graduating with an engineering degree in electronics and communication, Vinisha Joshi chose the road less travelled, and decided to pursue her career in content writing . Currently, she pens down articles for cuereport.com and a few other distinguished news platforms, pertaining to business and finance.