Computer companies said Britain is moving ahead with a discriminatory internet tax and U.S. officials need to respond.
The digital services tax proposed in the new U.K. budget would disproportionately affect U.S.-headquartered tech companies, said global tech trade association ITI. It would be a tax on U.K online revenue from search (Google), social media (Facebook) and online marketplaces (Amazon).
The U.S. and UK are about to start negotiating trade talks. ITI urged the U.K to rethink the tax.
“The digital services tax proposed by the UK represents the latest in a worrying and very real trend of countries departing from important multilateral efforts to secure an agreement on international tax reform,” said ITI president Jason Oxman.
The Computer & Communications Information Association also took issue with the tax.
“At a time when the U.S. is poised to begin negotiations with the UK on a comprehensive free trade agreement, the U.K.’s decision to follow other countries in pursuing discriminatory taxes against U.S. exporters is unfortunate and will threaten the strong U.S.-UK trade-in-services relationship," said CCIA president Matt Schruers. "Rather than pursuing taxes that guarantee trade conflicts, countries must remain committed to the ongoing multilateral process at the OECD to achieve lasting solutions.”