UK to press ahead with Digital Services Tax despite warnings from US

05 Dec 2019

Prime Minister Boris Johnson has said that the UK will continue with plans to impose its Digital Services Tax (DST) on American tech giants, despite the US threatening France for a similar move.

The Conservative Party has promised to introduce the DST on the revenues of the largest digital companies.

The DST will apply a 2% tax to the revenues of certain digital businesses. A double threshold will exist, meaning that businesses will have to generate revenues from in-scope business models of at least £500 million globally to become taxable under the DST.

The tax was first proposed by the former Chancellor, Philip Hammond, and is expected to raise £500 million a year.

France has already imposed a 3% levy on digital companies with revenues above €750 million (£670 million), of which at least €25 million is generated from French users.

However, this has led to President Donald Trump threatening to impose significant tariffs on French imports to the US.

Commenting on the tax, the Prime Minister said: 'I do think we need to look at the operation of the big digital companies and huge revenues they have in this country and the amount of tax that they pay. We need to sort that out. They need to make a fairer contribution.'