Nov 22, 2017
Budget 2017: Tech giants targeted over VAT payments
Digital firms' intellectual property is often owned by companies in tax havens, so large royalty payments are funnelled offshore. The chancellor is trying to tax this flow of money, acknowledging "Digitalisation poses challenges for the sustainability and fairness of our tax system". The Treasury isn't clear how its new digital tax will be enforced - it admits some companies have "No taxable UK presence". The plan to ensure people and businesses selling through online marketplaces pay the correct tax comes after warnings issued to Amazon and eBay last month about them profiting from sellers who were not charging VAT. A report by MPs estimated that up to £1.5bn in tax had been lost from these third-party sellers. "Alison Lobb, international tax partner at Deloitte, said:"It will be necessary to be able to clearly distinguish 'digital' companies subject to the digital turnover tax from other businesses.
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