American technology companies pay new British taxes
American technology companies pay new British taxes

Despite strong opposition from major technology companies and the US government, Britain is preparing to introduce taxes on digital services within three weeks. The UK government announced on Wednesday that it will impose a 2% tax on digital services such as search and advertising revenue on April 1.

The new tax is expected to apply to companies with global sales of more than 500 million pounds ($ 648 million) and at least 25 million pounds ($ 32.4 million) for UK users.

"This measure ensures that British paid taxes reflect the value of these companies interacting with UK users," the Treasury said in its 2020 budget. A tax declaration was filed in January. 2019.

This measure is designed to ensure that large technology companies, most of them American companies, pay more taxes on products sold in the UK. However, the US government believes that taxing digital services is unfair to US companies.

Jason Oxman, CEO of the Information Technology Industry Council, said the tax would directly and disproportionately affect companies in the United States.

Instead of continuing to impose new taxes, Oxman asked the UK government to solve the problem by negotiating new global rules among the OECD countries.

The UK government said on Wednesday that if the OECD undertakes a comprehensive overhaul of international taxes, it will cut 2% of the tax.

Several countries passed laws to tax digital services, including the French initiative that caused trade disputes with the United States when President Donald Trump threatened to raise taxes on French products.

At the World Economic Forum in Davos, US Treasury Secretary Steve Manuchin warned that when he sat with former British Chancellor Sajid Javed, states would impose state taxes - and the United States would respond.

"If people just want to arbitrarily impose taxes on our digital companies, we will consider arbitrarily imposing taxes on car companies," Mnuchin said.

New taxes could make trade negotiations between the United States and the United Kingdom more difficult, and the United States and the United Kingdom are seeking to conclude a new deal earlier this year after the legal separation from the United Kingdom.

"As the US government and the UK government prepare to negotiate trade and investment deepening, we urge the UK government to rethink the digital services tax," Oxman said.

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