Comment by beejiu
2 months ago
Businesses are traditionally taxed on their profits, not their turnover. Being a turnover tax, DST acts more like VAT does for consumers. Mathematically it has to be passed onto the customers, it just makes Google the collection agent on behalf of the government. This is why turnover taxes are such a bad idea.
The companies in question virtually don't pay any tax on profits though, even though it's pretty clear they're making money hand over fist.
Yes, it's true, but digital services tax was only supposed to be temporary and the UK agreed to move away from it once a global tax system was negotiated at the OECD. https://www.gov.uk/government/news/uk-agrees-transition-towa...
I think those talks have ultimately stalled, so the right solution is getting back on track to a global tax system.
(Interestingly the deal struck in 2021 exchanged the promise of no US tariffs with the transition away from DST. It's no surprise this is a hot topic again with Trump's tariff regime.)