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UK Online Revenue Tax Troubles Big Tech

Computer companies said Britain is moving ahead with a discriminatory internet tax and U.S. officials need to respond. 

The digital services tax proposed in the new U.K. budget would disproportionately affect U.S.-headquartered tech companies, said global tech trade association ITI. It would be a tax on U.K online revenue (opens in new tab) from search (Google), social media (Facebook) and online marketplaces (Amazon). 

Related: ITI Pans Digital Services Tax 

The U.S. and UK are about to start negotiating trade talks. ITI urged the U.K to rethink the tax. 

“The digital services tax proposed by the UK represents the latest in a worrying and very real trend of countries departing from important multilateral efforts to secure an agreement on international tax reform,” said ITI president Jason Oxman. 

The Computer & Communications Information Association also took issue with the tax. 

“At a time when the U.S. is poised to begin negotiations with the UK on a comprehensive free trade agreement, the U.K.’s decision to follow other countries in pursuing discriminatory taxes against U.S. exporters is unfortunate and will threaten the strong U.S.-UK trade-in-services relationship," said CCIA president Matt Schruers. "Rather than pursuing taxes that guarantee trade conflicts, countries must remain committed to the ongoing multilateral process at the OECD to achieve lasting solutions.” 

John Eggerton
John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.