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Comment by specproc | Hacker News Reader

This tax was introduced as a straightforward way to actually get tax revenues out of a multi-billion dollar industry that does not come remotely close to paying its fair share of tax in the UK.

The digital services tax was a limited counter to aggressive tax avoidance by US multinationals. Unfortunately, even though it's peanuts in the grand scheme of things, it's looking like it'll get offered up as sacrifice to the King in Orange.

UK corporations are expected to pay ~20% corporation tax, individuals pay _substantially_ more on their incomes. We've got a generation that've had to endure continual cuts to public services because "there's no money left", whilst foreign corporations make money off our public virtually tax free.

Google, Facebook etc., should pay their way or get out of our market.

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That was the intent, but in reality the tax is fully remitted to Google's customers. I'm a small UK business and it appears on my invoice, so I'm effectively the one being taxed. This is why I object to the campaigners calling for 10% DST. They don't realise the tax is mostly remitted back onto UK businesses, not the trillion dollar giants.

Out of interest, is that an advertising invoice or something like GCP?

I'm sorry, but until we can find a way to close down the countless other tax loopholes exploited by multinationals, I'd be completely happy with a 10% DST on any advertising targeting UK citizens. Low-hanging fruit.

Google Ads specifically.

What taxes on a business would not be eventually remitted to the customers?

Businesses are traditionally taxed on their profits, not their turnover. Being a turnover tax, DST acts more like VAT does for consumers. Mathematically it has to be passed onto the customers, it just makes Google the collection agent on behalf of the government. This is why turnover taxes are such a bad idea.

The companies in question virtually don't pay any tax on profits though, even though it's pretty clear they're making money hand over fist.

Yes, it's true, but digital services tax was only supposed to be temporary and the UK agreed to move away from it once a global tax system was negotiated at the OECD. https://www.gov.uk/government/news/uk-agrees-transition-towa...

I think those talks have ultimately stalled, so the right solution is getting back on track to a global tax system.

(Interestingly the deal struck in 2021 exchanged the promise of no US tariffs with the transition away from DST. It's no surprise this is a hot topic again with Trump's tariff regime.)

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