Burt welcomes UK digital revenue tax
David Burt, the Premier, said he welcomes the UK Government’s proposal for a new tax on digital revenues — which he expects to impact some Bermuda entities.
In his Budget statement yesterday, Philip Hammond, the British Chancellor of the Exchequer, said he planned to raise £200 million a year from a tax on the revenue of internet companies that avoid tax by transferring their profits overseas.
Mr Hammond said: “Multinational digital businesses pay billions of pounds in royalties to jurisdictions where they are not taxed — and some of these royalties relate to UK sales.
“So, from April 2019, and in accordance with our international obligations, we will apply income tax to royalties relating to UK sales, when those royalties are paid to a low-tax jurisdiction.”
A good example of this was Alphabet, the parent company of search-engine giant Google, transferring billions of dollars to a Bermudian subsidiary, which had no physical presence on the island, a widely reported case.
Hence, the planned levy has been dubbed “the Google tax” in Britain.
Mr Burt said today: “We welcome the Chancellor’s proposals to capture value on digital and other income originating in the UK, including presumably, on entities who currently have income allocated to Bermuda.
“We, of course, receive no income on these matters either.”
During the UK Budget debate, Jeremy Corbyn, leader of the opposition Labour Party, brought up the public release of documents stolen from law firm Appleby.
“It’s not as if this Government isn’t doing its best to protect tax havens and their clients in the meantime,” Mr Corbyn said.
“The ‘Paradise Papers’ have again exposed how a super-rich elite is allowed to get away with dodging taxes.
“This government has opposed measure after measure in this House, and in the European Parliament, to clamp down on the tax havens that facilitate this outrageous leaching from the public purse.”
Mr Burt also responded to Mr Corbyn’s remarks, stating that Bermuda had no place on any blacklist and that the island was recently given ‘whitelisted’ status by the Government of France.
“There appear to be one or two misconceptions about the role of Bermuda and some other territories in the wider UK economic portfolio,” Mr Burt said.
“As many know, since 2015 the automatic reporting regime means HM Revenue and Customs is informed real time of relevant corporate matters on the island.”
He added that Bermuda is a recognised leader in international tax compliance and tax transparency with 114 tax treaty partners, and, as an early implementer of the Common Reporting Standard, is the first UK Overseas Territory to adopt country-by-country reporting.
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