United Kingdom pushes ahead with tech tax plans

United Kingdom pushes ahead with tech tax plans

In a joint statement, Republican Chuck Grassley of Iowa, committee chairman, and Democrat Ron Wyden of OR said: "The digital services tax that France and other European countries are pursuing is clearly protectionist and unfairly targets American companies in a way that will cost U.S.jobs and harm American workers". "I profoundly believe that between allies we can and should resolve our differences through means other than threats", he said, per Reuters. It could culminate in retaliatory tariffs, which might open up a new trade war.

They state a duty is required in light of the fact that big, multinational internet organizations, for example, Facebook (FB.O) and Amazon (AMZN.O) are right now ready to book benefits in low-tax nations like Ireland, regardless of where the income starts.

Some experts fear France's unilateral approach with the digital tax will backfire, ultimately harming consumers and smaller businesses it aims to protect. In October 2018 the United Kingdom government's 2018 Budget included a proposed "Digital Services Tax" which would be 'a narrowly-targeted tax on the UK-generated revenues of specific digital platform business models' - primarily as a means of closing a loophole which has seen companies like Google dodge billions in tax.

The tax is expected to raise about €180m ($202m; £162m) from 2020, said Transport Minister Elisabeth Borne.

Such a move is supported by Google which believes it would mean Silicon Valley tech giants would pay less tax in the United States and more in other jurisdictions, in a departure from the longstanding practice of paying most taxes in a company's home country.

Still, the backlash against them is serious. The tax will hit about 30 companies, including major Irish employers Apple, Facebook and Google.

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CIGAINERO: The French government estimates it will rake in up to 650 million euros a year.

Both pieces of legislation apply only to the biggest tech companies, many of which are American. "We have got to find a way of taxing the Internet giants", he said.

The tax will only apply to tech companies with global sales over €750m which make more than €25m per year in France as the French government argues that these companies pay little or no tax in the country. Taxing revenue is meant to counter the complex arrangements most USA tech firms have in place to avoid paying high taxes on their profits.

Once an appropriate worldwide solution has been found, the United Kingdom would drop its own tax, the government added.

And the Internet giants will still be able to shop around for the most favourable tax regime.

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