In the UK, Brexit Leads to Taxit for Techs
March 13, 2020
US technology companies are likely to face a rocky 2020. The Coronavirus is creating some problems. If the information in “US Tech Companies Will Be Hit with New UK Tax in Just Three Weeks” is accurate, those juicy margins may be trimmed. The write up states:
The UK government said Wednesday [March 11, 2020] that it’s moving ahead with a 2% tax on revenue from digital services such as search and advertising starting on April 1. The levy will apply to firms with global sales of more than £500 million ($648 million), with at least £25 million ($32.4 million) coming from UK users.
Is the tax discriminatory? Yep.
What happens if the US technology companies pay up?
That’s easy. There are a number of European entities eager to implement a taxation model that generates revenue.
What happens if the US retaliates?
There will be collateral damage.
How likely will countries be to escalate if the tax fails? Some may implement a simple but Draconian solution: Throttling or blocking maybe?
Monopolies are good for those who obtain money from the firms in the cat-bird seat. Some European countries may not share the same view.
Stephen E Arnold, February 13, 2020
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