The U.K. government is implementing a 2 percent tax on the revenues of search engines, social media services and tech giants including Facebook, Google, Amazon, Microsoft and eBay, beginning April 1.
“The application of the current corporate tax rules to businesses operating in the digital economy has led to a misalignment between the place where profits are taxed and the place where value is created,” said the U.K. HMRC tax office.
The measure is designed to ensure that large multinational businesses make a fair contribution to supporting vital public services in the United Kingdom.
According to Data Economy, the U.K. government expects to raise around £280 million ($343 million) in the next financial year from the tax and £515 million ($632 million) in fiscal year 2024-25.
