OECD tells the UK to hold off on tech tax as firms continue to make a tidy profit

The Organisation for Economic Cooperation and Development (OECD) has urged the UK to pause its attempt to bring in a new tax on tech firms that’s intended to come into force in April. The organisation’s Secretary General, Angel Gurria, told the BBC that without a global solution to the taxing of tech firms that there would be “a mess” of 40 countries implementing their own plans which could cause "tensions rising all over the place" .

The UK currently has plans to impose a 2% tax on the UK revenues of search engines, social media companies, and online marketplaces; this would cover big players including Google, Microsoft, Facebook, Twitter, eBay, and Amazon. If the tax still goes ahead, firms can expect to start paying more in April, with that said, France has agreed to delay its digital tax and the UK could do the same if it comes under pressure from the US.

While the OECD may not like it, countries may have to impose their own individual taxes against tech firms. In November 2018, we reported that a plan to implement a 3% sales tax on big tech firms by the EU was scuttled by just three countries in the 28-member bloc. If just 28 countries cannot reach an agreement, there’s not much hope right now that roughly 195 countries, globally, can agree to a set of tax rules.

Last year, Eric Schmidt defended Google’s tax avoidance schemes explaining that he was “very comfortable” with the company’s conduct. In the interview, Schmidt said that when the world comes to an agreement on a global digital tax that the firm would be happy to follow the rules, he knows, however, that such a consensus will be very difficult for countries to achieve.

Source: BBC News

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