Philip Hammond: UK eyeing data tax bill as US disengage
BIRMINGHAM, England — The U.K. is eyeing a data bill for tech giants after giving up on U.S. cooperation to reform the tax system, Chancellor Philip Hammond said Monday.
The U.K. chancellor set out more details about how he might impose a digital services tax after earlier warning the “time for talking is coming to an end” in his keynote speech at the Conservative Partys annual conference. The U.K. was willing to go it alone on a “digital services tax,” he said.
Speaking later at an event on the fringes of the conference in Birmingham, Hammond gave more detail.
“You impute a value to the data that is gathered from U.K. consumers and the content that is uploaded by U.K. consumers,” he said. “To do that you have to make two calculations. First of all, what part of the value the business generates overall is fairly attributable to the data from consumers as opposed to the value of the algorithms. Secondly, what proportion of the global business is in the U.K. You look at global reported profits and then you do a calculation and then you send a bill.”
The U.K. Treasury has long insisted that while it would prefer to reform the tax system multilaterally through the Organisation for Economic Co-operation and Development (OECD), the U.K. would be willing to act alone.
Hammond said: “Because of Mr Trumps tax reforms, these look like companies that will be paying U.S. tax in the future and suddenly we find our U.S. colleagues are not quite so interested in engaging in this debate. I have to say, my prognosis is that it is quite unlikely we will be able to achieve international agreement in anything like a sensible time scale because the U.S., frankly, is not really onside with this agenda.”
Hammond will deliver his annual budget on October 29. A Tory official declined to comment on whether the data tax plan would be set out then.