[CTC] X stands to benefit if UK pulls digital services tax in trade deal with US

[Arthur Stamoulis]

*This is a good example of the problem with “America First” trade policy.
It cynically tries to paint American workers and the billionaire class as
having the same economic interests based on our shared nationality.  If, as
has been speculated in some corners, Trump’s trade deal with the UK cuts
over a billion dollars in taxes for Big Tech firms — including likely cuts
for his billionaire buddy Elon Musk — that does shit all for American
workers.  Working Americans deal with the fallout of his tariffs chaos, and
we get foreign tax cuts for the rich in exchange?  This isn’t what
Trump-leaning members of the electorate are looking for. —Arthur*



https://www.theguardian.com/technology/2025/mar/24/elon-musk-x-stands-to-benefit-if-uk-pulls-digital-services-tax-in-trade-deal-with-us#:~:text=If%20a%20company%20qualifies%20on,line%20to%20pay%20the%20tax


X stands to benefit if UK pulls digital services tax in trade deal with US
This article is more than 1 month old
Prominent campaigner says Elon Musk’s platform qualifies for the levy,
which is on the block in negotiations

Elon Musk’s X stands to benefit financially if the government pulls an
£800m tax on US tech firms as part of an economic deal with Donald Trump
<https://www.theguardian.com/politics/2025/mar/23/starmer-is-warned-against-appeasing-trump-with-tax-cut-for-us-tech-firms>,
as a prominent tax campaigner indicated the social media platform qualifies
for the levy.
Dan Neidle, the head of the non-profit organisation Tax Policy Associates
<https://www.theguardian.com/business/2023/jun/25/im-embarrassed-about-how-horribly-overpaid-i-was-tax-campaigner-dan-neidle>,
said the social media platform was eligible for the digital services tax,
which is on the block in negotiations between the US and the UK.
“Technically it’s fairly clear X
<https://www.theguardian.com/technology/twitter> should pay the DST,” he
said.
Ministers have been discussing dropping the DST as part of negotiations
with the US in exchange for the Trump administration granting the UK a
carve-out from tariffs which would otherwise be levied on 2 April.

The technology secretary, Peter Kyle, said on Monday that “nothing was off
the table” when it comes to the tax, which was first imposed by the
Conservatives in 2020 to stop international technology companies avoiding
tax by hiding their profits offshore.
Kyle told the Politico Tech podcast: “We are exploring all of the things
that both territories, the United Kingdom and the US, either are concerned
about or are excited about doing into the future.”
His comments add to similar remarks from the chancellor, Rachel Reeves,
over the weekend. She told the BBC: “We’ve got to get the balance right,
and those discussions at the moment are ongoing.”
Labour MPs have voiced their concern about the prospect of the government
dropping the DST under pressure from the Trump administration. Rachael
Maskell said this weekend: “I would be concerned if relief was granted in
what would be seen as a dash to let the US tech companies off the hook,
while at the same time as making disabled people pay for the revenue loss,
with their lifelines being cut.”
Another Labour MP said: “This would be the very worst optics: dropping a
tax on big tech companies in the same week we announce more departmental
spending cuts and give the details about our welfare cuts.”
Reeves already faces political pressure over spending cuts to meet the
government’s fiscal rules, including a £5bn welfare overhaul
<https://www.theguardian.com/politics/2025/mar/18/britain-welfare-overhaul-disability-benefits-pip-liz-kendall>
and
10,000 job losses in the civil service. Scores of Labour MPs voiced
significant doubts about the government’s welfare changes
<https://www.theguardian.com/politics/2025/mar/18/britain-welfare-overhaul-disability-benefits-pip-liz-kendall>
in
a tense meeting last week with the work and pensions secretary, Liz Kendall.

The DST covers search engines, social media platforms and online
marketplaces that cater for UK users. To come within scope, tech businesses
need to generate more than £500m in worldwide revenues and more than £25m
from UK users. If a company qualifies on that basis, their revenues from UK
users are taxed at 2%.
According to X’s last published results for its UK operations, the company
made revenues of £205m, putting it in line to pay the tax. A company’s
first £25m of UK revenues are exempt from the tax, meaning X would
theoretically have been in line to pay around £3.6m under the DST that
year, but its results do not explicitly state that such a payment was made.
According to the National Audit Office, 90% of DST revenues in its first
year of operation in 2020-21 came from five businesses. Amazon, Google,
eBay and Apple have publicly acknowledged paying the tax, and Facebook’s
parent, Meta, is widely presumed to have done so.
The tax is expected to raise £800m this year, rising to £1.1bn by the turn
of the decade, according to the Office for Budget Responsibility
<https://obr.uk/docs/dlm_uploads/OBR_Economic_and_fiscal_outlook_Oct_2024.pdf>
.
Neidle said the DST was a “diplomatically complicated” tax, with the UK
having pledged to abolish it when an internationally agreed tax regime for
multinationals is introduced, brokered by the Organisation for Economic
Co-operation and Development
<https://www.theguardian.com/business/oecd> (OECD).
Failure to introduce the so-called pillar 1 regime so far has left the OECD
and DST “in a bit of a limbo”, he said
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.citizenstrade.org/pipermail/ctcfield-citizenstrade.org/attachments/20250508/12b2b38b/attachment.htm>