Ideas sought for design of tax on digital business

The government is consulting on the design and implementation of the digital services tax (DST). This is intended to be an interim response to the challenges that digital businesses create for the international corporate tax system. As such, HMRC states it is ‘proportionate, narrowly targeted, and intended to ultimately be a temporary tax, to be replaced by a comprehensive global solution’.

The consultation looks at:

• the proposed approach to defining the business activities within the scope of the tax;
• the proposed approach for determining the instances when revenues become taxable;
• the detailed design of the safe harbour;
• the effect of the DST being a deductible expense for corporate tax purposes;
• the review mechanism and the link to the international process; and
• reporting and payment.

The tax will apply from April 2020, and be legislated in Finance Bill 2019-20.

Comments are requested by 28 February 2019.

See DST consultation document.

Issue: 4672 / Categories: News