Earlier this week, Amazon announced that they would be passing the cost of the UK’s new digital services tax on to its sellers. Amazon will transfer the 2% charge to retailers who use their marketplace, many of whom are smaller businesses, who will have to absorb this cost into already tight margins.
The new tax regulations, which will ensure digital services being sold from offshore are taxed at the point of consumption rather than low-tax environments such as Ireland and Luxembourg, are expected to bring in around £500 million annually. Targeted at tech giants such as Amazon and Google, who have recently been publicly called out for the low amounts of corporation tax they pay, the new laws announced in April were intended to force the businesses to “pay their fair share.”
To find out more about the digital sales tax, including which taxes are being imposed and which services are included click here.
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