Sunak is poised to agree Amazon tax
Chancellor hopes to secure international agreement on taxing online firms ahead of G7 meeting
RISHI SUNAK is hoping to agree a new “Amazon tax” with major industrialised nations within months after opening talks with Joe Biden’s new administration in Washington.
The Chancellor has made clear that one of his priorities is to get a new international agreement on how to tax online companies’ profits by June’s G7 meeting in Cornwall.
Mr Sunak said: “One of my priorities in the G7 this year, which I’ve already started work on, is to try and get international agreement on a new way to tax these companies.
“I spend a lot of time talking to my finance minister colleagues around the world about this issue.”
Mr Sunak has already held talks about the new tax with Janet Yellen, the US treasury secretary. Other talks are planned with G7 finance ministers to try to get agreement.
International agreement is required because taxation of profits is governed by OECD tax treaties, and they haven’t been changed for decades.
A Treasury insider said: “The US has signalled now an openness to engage constructively in the debate and try to reach resolution on it which is really positive. He has spoken to Janet Yellen specifically about this.”
Separately the Chancellor – who last year brought in a Digital Services Tax which taxes companies that provide a social media service, search engine or an online marketplace – is already looking at a new online sales tax as part of a review of business rates.
The online sales tax is one of as many as 30 new revenue raising measures which will be published by the Treasury in a Tax Policies and Consultations Update on March 23, dubbed “tax day” in Whitehall.
As The Sunday Telegraph reported last week one idea is a tax on deliveries to cut down on emissions from online delivery vans. Other measures that will be looked at include a shake up of Air Passenger Duty and tax administration.
Normally they are published alongside the Budget on the same day but Mr Sunak wanted to strip them out to ensure they were not lost in the various tax and spend announcements.
Any final announcements about the different taxes will be saved until the Budget this Autumn.
Mr Sunak has already set up a new digital markets unit in the Competition and Markets Authority to monitor how tech giants like Google and Facebook are regulated.
Treasury insiders said several of these consultations are an important part of the Government’s 10-year tax administration strategy, “Building a trusted, modern tax administration system”, which was published in the summer of last year.
Mr Sunak has played down suggestions of a wealth tax on the grounds that people’s assets are tied up in their homes or savings which already fall in the scope of HM Treasury.
A Treasury spokesman said: “To allow for more transparency and scrutiny, documents and consultations that would traditionally be published at a Budget will be published on 23 March.
“This will ensure tax professionals will have a better opportunity to feed into consultations and policy discussions, which will strengthen policymaking. None of the announcements will require legislation in the next Finance Bill or have an impact on the government’s finances.”