// UK government to impose a 2% levy on online retailers that make over £500m in digital revenue with over £25m from the UK
// Government asserts that the digital services tax will raise £400m per year by 2021
// Chancellor Philip Hammond first announced the “Amazon tax” last year
// The White House threatened to impose tariffs on France for similar legislation
The UK government has announced plans to lay down a digital services tax on online retail giants such as Amazon.
The new digital services tax means companies that make over £500 million in digital revenue, with over £25 million deriving from the UK, will have to pay a two per cent levy on revenue.
The UK government asserts that the digital services tax will raise £400 million per year by 2021.
Chancellor Philip Hammond first announced the “Amazon tax” last year.
It will now come into effect next April, according to draft legislation of the government’s next finance bill.
It comes after the White House threatened to impose tariffs on France for similar legislation, which it said unfairly targets US companies.
“The UK has always sought to lead in finding an international solution to taxing the digital economy,” Treasury financial secretary Jesse Norman said.
“This targeted and proportionate digital services tax is designed to keep our tax system in this area both fair and competitive, pending a longer term international settlement.”