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New UK Digital Tax Measures

New UK Digital Tax Measures

New UK Digital Tax Measures

TaxWatch

TaxWatch

Access KPMG's client-only portal of publications on topical tax issues.

The United Kingdom (UK) published a public consultation on 9 November 2018 on its proposed new Digital Services Tax (DST) which was announced on Budget day (29 October 2018). The consultation closes on 28 February 2019.

The new UK DST is proposed to come into effect from April 2020 and is proposed to have a narrower scope than proposals put forward by the European Union (EU) in March 2018. However, the UK DST has a broader scope than the most recent set of proposals at EU level, which EU Finance Ministers have not yet reached agreement on – details can be viewed in another article from this edition of TaxWatch which is available here. It is also proposed to apply at a lower rate than the EU’s equivalent proposals.

The UK chancellor also announced as part of the UK Autumn Budget that the UK will introduce an expanded set of taxing rights in relation to intangible property connected with UK sales. These measures are likely to have a significant impact for in scope businesses.

In this article, Mat Scott of KPMG’s Belfast Tax practice takes a brief look at:

  • The DST proposals and their likely impact on in-scope businesses,
  • What they might mean for the EU’s similar proposals,
  • How interim measures proposed by the UK and the EU might affect not just in-scope technology companies but also consumers, and
  • The proposals to expand UK taxing rights in relation to intangible property connected with UK sales and their likely impact on in-scope businesses.
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