UK Spring Statement Focuses on Digital Economy | KPMG | CA

UK Spring Statement Focuses on Digital Economy

UK Spring Statement Focuses on Digital Economy

The UK's Spring Statement introduces several new consultations, but no new tax measures.

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As expected, the Spring Statement mainly focuses on the taxation of the digital economy. The UK is announcing it will update its position paper on the topic, which it previously presented in its 2017 Autumn Budget; it is also calling for evidence regarding the role of online platforms in ensuring user tax compliance.

Position paper update - Taxation of the digital economy
The UK provided an update on its position paper on corporate tax and the digital economy. Originally presented in its 2017 Autumn Budget, this paper invited comments on how profits from digital businesses should be taxed internationally. It also introduced a new concept involving taxing the value created by user participation. The UK confirms it will continue to pursue this approach. Although preferring multilateral coordination, the UK may also introduce an interim measure in this area, depending on the level of international action on tax and the digital economy.

New consultations announced
The Spring Statement announces several consultations, including the following:

Cash and digital payments in the new economy-A request for comment on the role of cash and digital payments in the new economy.

Online platforms' role in ensuring tax compliance by their users-A request for comment on how UK tax authorities can effectively tax residents earning income on online platforms.

Alternative method of VAT collection: split payment-Following on from the previous call for evidence on alternative methods of VAT collection, the UK is releasing a follow-up consultation on how a potential split payment mechanism could work to combat online VAT fraud.

Upcoming consultations
A number of UK consultations will be announced in the coming months. They will address the oil and gas industry, the taxation of short term business visitors, and the taxation of trusts, among others things.

For more information, contact your KPMG adviser.

 

Information is current to March 20, 2018. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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