THE Chancellor will this week urge G7 nations to slap a tax on web giants like Facebook and Apple.
Philip Hammond wants to “thrash out” a solution to bring the international tax system into the digital age.
Philip Hammond will urge G7 nations to slap tax on web giants like Facebook and Apple[/caption]
He plans talks with US Treasury Secretary Steven Mnuchin when finance chiefs meet in France tomorrow.
He said: “Consumers are not prepared to tolerate very large companies making very large revenue in their markets and paying no taxes at all locally.
“The problem we have got is the international tax was system designed in the 1920s and 1930s.
“It was designed around shopping of physical goods and does not work well in the digital age.”
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France has revealed plans to put a three per cent levy on revenues made inside the country web firms.
Spain has also lined up its own internet tax.
But Mr Hammond signalled that EU nations want an internationally-agreed answer.
Our Treasury has confirmed plans for a digital services tax of two per cent on revenues for search engines, social media platforms and online marketplaces serving customers here.
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Mr Hammond yesterday said that will take effect next year and target firms with revenues in excess of £500million a year.
Challenged on whether the move would hit Facebook, he said: “There’s a perfectly understandable argument that if your business model is about interacting with consumers, collecting data from consumers then you are generating value where those consumers are.
“But those companies do not pay any tax where those consumers are.”
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