Digital services tax could become permanent, warns CIOT

The digital services tax was designed as an interim tax before the reforms to international tax rules to ensure that multinational enterprises pay a fair share of tax wherever they operate said the House of Commons’ Public Accounts Committee (PAC) in a recent report.

However given the likely delay to the first stage of these reforms - pillar one - the digital services tax is likely to have a longer life than intended. The committee was concerned that this may prompt businesses within the scope of the tax to consider using the resources and expertise at their disposal to circumvent it. It said HMRC will need to be ready for that scenario with robust measures to ensure compliance in the longer-term if needed.

Sarah Olney who led the inquiry said: ‘We were very pleased to see HMRC finally getting to grips with the...