The U.K. Treasury announced in its budget documents that it will introduce a digital service tax on search engines, social media services and online marketplaces. "The application of the current corporate tax rules to businesses operating in the digital economy has led to a misalignment between the place where profits are taxed and the place where value is created," the Treasury said. The rate of the tax will be 2% and raise around GBP2 billion for the public finances and take effect in April. The tax will be applied to companies with at least GBP500 million in global revenue and GBP25 million in U.K. revenue, meaning firms including Google (GOOGL), Facebook (FB) and Amazon (AMZN) will be hit. The first GBP25 million in U.K. revenue will not be subject to the new tax.
-Steve Goldstein; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
March 11, 2020 12:12 ET (16:12 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.