From 1st April 2020 UK Will Introduce a 2% Tax on Revenue of Search Engines, Social Media Services and Online Marketplaces with Global Revenue of over £500 Million

The U.K. government has confirmed that it will levy a 2% tax on “the revenues of search engines, social media services and online marketplaces, which derive value from U.K. users” starting from April 1. Companies with global revenue of over £500 million (or about $650 million), where more than £25 million is derived from U.K. users, will be charged the tax.

There is an allowance of £25 million, which means a group’s first £25 million of revenues derived from UK users will not be subject to Digital Services Tax. The Digital Services Tax will be payable and reportable on an annual basis.