UK Treasury Consultation on a Proposed Digital Services Tax

The BMG has submitted comments to the UK Treasury on its proposal for a Digital Services Tax, available here..

While there is a great need to remedy the defects of the international tax system, exacerbated by digitalisation of the economy, in our view this proposal is flawed. It is ring-fenced, and would apply only to some types of highly digitalised business models. Defining the taxable revenues by reference to user contributions would create major boundary problems, requiring firms to attempt to segregate revenue streams artificially. A multilateral solution would need to take a broader approach and should not target only once aspect such as user contributions.