The companies dealing in the internet services have always been blamed for not paying enough in taxes. In fact, most of these companies are the US and thus have multinational earnings. They usually tend to be outside the purview of the taxation policies of most nations. A few countries in Europe have been contemplating imposing a digital tax on these companies.
France has already gone ahead with the imposition of a 3 percent levy on the earnings of the internet companies which earn their revenue from the cyberspace. The primary among these companies include Google and Facebook. A host of the companies affected by this new taxation are American, while there are a few others that are headquartered in China, Germany, Britain and even France itself.
Close on the heels of France, Italy will begin levying the digital tax from January 1. Turkey has plans up its sleeves to impose a tax at the rate of 7.5 percent. The UK has both its leading political parties gearing up for the digital taxes soon. It may be important to notice here that Britain is going for national elections on December 12 and the issue of digital tax can be of paramount importance. Some other countries planning a similar move include Austria, Spain, and Belgium.
We do not expect the US government to take it all sitting down. It has already proposed tariffs to the tune of $ 2.4 billion on the French products. It also has plans to initiate investigations into the proposed taxation by Austria, Italy, and Turkey.
Boris Johnson, the British Prime Minister has categorically stated that the UK will stick to the digital taxation despite the risk of US tariffs. The proposed tax is planned to be at 2 percent and will go live in April 2020.
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