Amazon to pass on UK’s 2% digital services tax to sellers

Amazon is set to increase fees for UK sellers by 2% in response to the introduction of the UK’s digital services tax. The company says it will no longer absorb the UK’s Digital Services Tax after talks with the government failed to progress. The UK’s digital service tax came into effect on 1 April 2020. It is an annual digital tax on revenues generated by tech companies that operate search engines, social media platforms, and online marketplaces with revenues above £500 million.

France and the UK went ahead with their own digital service tax legislation after global discussions as part of the Organisation for Economic Co-operation and Development’s (OECD) Base Erosion and Profit Shifting (BEPS) project failed. The two countries described their decisions as a temporary measure pending international agreement on taxing the digital economy.