The United Kingdom government is cracking down on technology companies like Apple, Google and Amazon, with the country’s Treasury department announcing upcoming changes that will tax any UK earnings, regardless if they are held offshore.
Starting in April of 2019, UK’s tax authority will charge a 20% tax on any British earnings.
They say the change is in response to the coming of the digital age. Companies like Apple, Facebook, Google and Amazon would traditionally shift their UK profits overseas to avoid paying as much in British taxes (they’ve taken the same approach in many other countries).
UK Chancellor unveiled the tax reform on Wednesday in their 2017 budget, saying there’s a “wider concern in the business community about the tax system in the digital age.”
“Multinational digital businesses pay billions of pounds in royalties to jurisdictions where they are not taxed,” added the chancellor. “And some of these royalties relate to UK sales.”
This is just another tightening of control over taxes for technology companies.
The European Union has been battling with Apple and Ireland over their sweetheart tax deal in recent years, demanding that Ireland collect billions in unpaid taxes.