Any supremely-profitable industry is bound to be taxed sooner or later, esp if its foreign. I haven't seen any details though. Is it a % of ads sold? Or some other mechanism?
It's going to "happen" in 2020. Plenty of time to change their minds...
Tech giants face 2% UK digital services tax
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Re: Tech giants face 2% UK digital services tax
#12When thinking about the UK rolling out new taxes, this inevitably comes to mind: https://youtu.be/pmgcylAxjfY?t=118
Re: Tech giants face 2% UK digital services tax
#13Earlier quoted context omitted.
Also, what seems to have provoked this tax in the UK specifically is the tendency for such companies to artificially lower their profits to more or less avoid UK corporation tax altogether by claiming that sales of UK clicks to UK companies handled by UK based account managers were in fact completed in Ireland...
Exactly. I'm no fan of the current UK Government, but their hand has been forced. I'd rather all countries get together and ratify a standard for where profits can be realised. Hopefully this will open the dam for the others to get involved.
That is what Philip Hamond (last sane person in the cabinet) said - that of there was international agreement they would go with that.
Re: Tech giants face 2% UK digital services tax
#14I wonder if the recent "link tax" forced into the proposed EU copyright legislation has something to do with making this "digital tax" work in practice. Wouldn't be the first time that copyright law is used for something completely different to what it was meant for.
Nope its on faking low profits aka tax avoidance
Re: Tech giants face 2% UK digital services tax
#15I was scared for a minute. I thought this was about taxing consumer for accessing internet.
It's fine. It's about taxing giant corporations who are evading taxes.
Re: Tech giants face 2% UK digital services tax
#16Ed Sheeran pays more tax in the UK than Amazon.
Re: Tech giants face 2% UK digital services tax
#17I was scared for a minute. I thought this was about taxing consumer for accessing internet. It's fine. It's about taxing giant corporations who are evading taxes.
It'll likely trickle down to the consumer... the consumer will end up paying somehow.
Re: Tech giants face 2% UK digital services tax
#18One thing that will be interesting around this is any future trade negotiations the UK has with the US, especially after we leave the EU.
This tax will target the US giants.
Re: Tech giants face 2% UK digital services tax
#19I was scared for a minute. I thought this was about taxing consumer for accessing internet. It's fine. It's about taxing giant corporations who are evading taxes.
> It's about taxing giant corporations who are evading taxes.
I wouldn't say "evading" unless what they are doing is illegal. If they are following the law, and the law allows what they're doing, then it's not tax evasion.
If you're not happy, then change the law to actually make it illegal, and then if those companies are still doing it then you can call it tax evasion.
Re: Tech giants face 2% UK digital services tax
#20Good. It is becoming more and more apparent that there is a toll on society created by these companies. They have a negative impact on our domestic businesses (traditional brick and mortar, as well as home-grown digital businesses) not to mention our mental health and even democracy. By taxing them, hopefully we can go some way to reversing some of that damage (although I'm less hopeful of that...).
So you see it as a tariff? Do not let the more efficient foreign player in, to let the local equivalent develop? Economically it does not make sense, if we are looking for a global optimum (literally); this is the standard free-trade argument. It may make sense if there's no global trust; you don't want to depend on products of a potential unfriendly party, or let them have a large foothold in your economy, just, wel…
I take your point, but I think you've over simplified the situation. For example, in days gone by, the UK tax system happily forced retailers to pay vast amounts of tax ("business rates") based on the shops they occupied in town centres. This was part of the total tax burned on retailers. Online retailers avoid this tax and thus could be considered to have an unfair advantage over bricks-and-mortar stores.