CIOT responds to consultation on digital services tax

Released 01 March 2019

The Chartered Institute of Taxation (CIOT) has published its comments sent to HM Treasury and HMRC on the digital services tax consultation.

On 7 November 2018, HM Treasury and HMRC published a consultation on the detailed design and implementation of a digital services tax (DST) that the Government has announced will be introduced in April 2020. The CIOT broadly supports the proposed design of the tax but is concerned that, being a tax on revenues, this tax will inevitably over-tax some companies and under-tax others. The CIOT is also concerned that the computation of the tax will rely heavily on information held by companies outside their accounting systems and the preparation and review of returns could become dependent on third party ‘audit’ of the return. Therefore, the CIOT considers that it is very important that this tax is clearly a temporary measure, and it should, potentially, be time limited, being legislated to be in place for no longer than, say, five years. In any event the tax should be repealed once the OECD concludes on long term reform.

View the submission at Digital services tax - CIOT comments.

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