London Daily

Focus on the big picture.
Tuesday, Jun 09, 2026

G7 plan will slash UK tax revenue from US tech firms, say experts

G7 plan will slash UK tax revenue from US tech firms, say experts

Global changes could mean Treasury loses £230m from Google, Amazon, Facebook and eBay
Experts have warned that US tech companies, including Google, Amazon and Facebook, could pay less tax in the UK and several other big economies under global reforms agreed at the weekend by the G7.

In a key stumbling block emerging days after the landmark deal, research from the TaxWatch campaign group indicates that the UK Treasury stands to lose about £230m from the taxes paid each year by four of the big US tech firms.

The study estimates that Facebook, Google, eBay, and Amazon, contribute about £330m between them to the UK’s digital services tax – a levy on internet search providers, online marketplaces and social media firms. The tax was launched last year as a stopgap measure until a global deal could be reached.

TaxWatch said the UK tax bills paid by these firms would fall to just over £100m under the G7 plan.

The campaign group calculated the sum by analysing the UK accounts of each company for 2019, the most recent year when data was available. Although precise details of the global tax changes are still being negotiated and limited information has been published so far, the group estimated tax liabilities based on details in the G7 communique published last weekend.

According to the research, Google is estimated to contribute £219m to the digital services tax but would pay just £60m to the UK exchequer under the G7 plan.

For Facebook the tax take would fall from £58m to £28m. For Amazon it would drop from £50m to £10m, and for eBay from £19m to £3.8m.

The figures are estimates because the Treasury does not publish a breakdown of the amount each firm contributes to its digital services tax.

A Treasury spokesperson said the final details of the rules still needed to be worked through, and that the impact on tax revenues would be assessed by the independent Office for Budget Responsibility.

“The historic global tax agreement backed by G7 finance ministers reforms the global tax system to make it fit for the global digital age, achieving a level playing field for all types of companies. The deal makes sure that the system is fair, so that the right companies pay the right tax in the right places,” he added.

Sources close to the talks said the UK and EU nations were continuing to push for more in tax to be raised within their borders by large US tech companies. It comes ahead of the next key moment for tax reforms, at a meeting of the G20 in Venice in July.

Chris Sanger, global government and risk tax leader at the accountancy firm EY, said: “The UK will not want to turn off the taxing of those global multinationals, under the digital services tax, until it feels it has another tax that can deliver equally or better. There is still a lot of detail to be worked through in this space.”

At the heart of the issue are the two “pillars” in the G7 deal: one enables countries to tax large company profits based on their sales in that market, and a second sets a minimum global corporation tax rate. The global minimum would be set at a rate of at least 15% and capture thousands of firms and be paid in their home countries.

Because so many multinationals have their headquarters in the US, other nations are demanding that the largest companies also pay tax in nations where they generate their revenues. So under pillar one, the UK should receive a portion of the tax generated in the country by Apple and Facebook.

A mechanism for redistributing the profits of the largest companies is under discussion. A list of 100 companies whose profits could be divvied up in this way was presented at the G7. The list remains confidential, though is understood to include tech companies, but not banks or extractive firms such as mining and oil groups.

The redistribution mechanism would apply to companies with “superprofits” – profit margins exceeding 10% of revenues.

Although experts believe pillar one redistribution would generate relatively little for the UK, the Treasury would still gain an estimated £7.9bn each year from the global minimum rate under pillar two. This is because the global minimum tax is paid to a firm’s home country, and the UK has several large multinationals on its shores that would be caught.

Analysts at the EU Tax Observatory have suggested firms such as BT, Barclays, HSBC and BP, could be caught up in the pillar two arrangement.

Sources close to the tax reforms, which are being negotiated between 139 countries at the Organisation for Economic Co-operation and Development (OECD), said the UK and EU finance ministries were pushing for tougher concessions from Washington to raise more in tax from large US companies outside their home jurisdiction.

The Biden administration has however focused minds by threatening to impose punitive tariffs on imports from the UK and five other countries in retaliation for digital services taxes recently imposed on US corporations.

Tax campaigners warned that lower-income countries, which do not have multinationals based on their shores to benefit from a global minimum tax, would not stand to gain much from the limited amount of tax to be raised from pillar one. This could become a key sticking point at wider G20 talks in Venice next month.

George Turner, director of TaxWatch, said: “It seems to me this is a good deal for the US, they get to tax their multinationals more, and they get to protect themselves from companies trying to [go] offshore by making it a global deal.

“The fact Facebook and Google end up paying less tax in the UK under this deal is controversial, I don’t think you can get away from that. It wasn’t the aim of the whole game.”
Newsletter

Related Articles

0:00
0:00
Close
Japanese Technology Firm Fujitsu Launches Advanced Artificial Intelligence Tool for Corporate Disclosures
South Africa Officially Launches Nationwide Campaign for Highly Contested Local Government Elections
United Kingdom Commits Additional Funding for Unexploded Ordnance Clearance in Laos
Singapore Announces Stringent New Greenhouse Gas Regulations for Commercial Cooling Systems
Cambodia and Thailand Hold High-Level Border Security Talks at United Nations Headquarters
Myanmar Military Government and China Sign Major Agreement to Upgrade Media and Cultural Cooperation
Knife Attack at Swiss Train Station Leaves Three Injured in Suspected Act of Domestic Terrorism
Transnational Extortion Gang Threatens Canadian Police With Army of One Thousand Armed Operatives
Australia Imposes Forty-Two-Day Quarantine on Cruise Ship Passengers Following Deadly Hantavirus Outbreak
International Monetary Fund Unlocks Seven Hundred Million United States Dollars for Sri Lanka Following Economic Reforms
Australia Launches Record One Point Four Billion Dollar Lawsuit Against Chemical Giant 3M Over Contamination
China and Canada Foreign Ministers Meet in Ottawa in Effort to Stabilize Strained Diplomatic Ties
Indonesia Demands Urgent United Nations Security Council Reform Amid Escalating Global Conflicts
Extreme Weather Patterns Trigger Severe Drought in Madagascar and Destructive Flooding in East Africa
Indian State of Karnataka Faces Political Upheaval as Chief Minister Siddaramaiah Abruptly Resigns
Philippines and Japan Reaffirm Defense Ties as Crucial for Indo-Pacific Regional Stability
Norway Joins French Nuclear Deterrence Initiative in Major Shift for European Security Architecture
Global Critical Mineral Alliances Expand as Western Nations Move to Counter Chinese Supply Dominance
United States Imposes Fifty Percent Tariffs on Mexican Steel and Aluminum Ahead of Trade Pact Review
European Union and China Head Toward Major Trade Conflict Over Clean Technology Exports
United States Economic Growth Severely Downgraded to One Point Six Percent as Stagflation Fears Mount
World Health Organization Warns Central African Ebola Epidemic is Outpacing Containment Efforts
United States Treasury Department Conditions Sanctions Relief on Reopening of the Strait of Hormuz
Iranian Air Defenses Intercept and Destroy United States Military Drone Over Bushehr Province
Iranian Armed Forces Launch Ballistic Missiles Toward Unspecified Targets Prompting Regional Condemnation
United Nations Secretary-General Warns Global Order Facing Highest Level of Conflict Since 1945
Israel Issues Sweeping Evacuation Orders in Southern Lebanon Amid Intensified Hezbollah Conflict
Russia Announces Systemic Military Strikes Targeting Ukrainian Defense and Energy Infrastructure
United States and Iranian Negotiators Reach Draft Agreement to Extend Ceasefire and Resume Nuclear Talks
United Nations Security Council Deeply Divided Over United States Capture of Venezuelan President
US and Iran Exchange Direct Military Strikes Amid Fragile Gulf Ceasefire
World Health Organization Warns of Catastrophic Ebola Outbreak in DR Congo
Russia Threatens New Wave of Strikes on Ukrainian Infrastructure and Embassies
Scientists Warn Atlantic Ocean Currents Could Collapse Faster Than Projected
Anthropic Reaches $900 Billion Valuation in Historic AI Funding Round
Washington Imposes Crippling Sanctions on Iranian Maritime Authority
Japan and the Philippines Initiate Strategic Intelligence-Sharing Pact
Microsoft Deploys Autonomous Computer-Using AI Agents to Global Markets
Anthropic Secures $45 Billion Compute Infrastructure Agreement With SpaceX
U.S. Director of National Intelligence Resigns Amid Administration Shakeup
Micron Technology Crosses Trillion-Dollar Valuation Amid Unprecedented Hardware Demand
Canada and Germany Finalize Historic Long-Term LNG Export Agreement
China Expands International Travel Restrictions on Domestic AI Researchers
Japan Approves Sweeping Overhaul of National Intelligence Apparatus
Global Airlines Scramble Logistics as Middle East Airspace Remains Fractured
Japan's Naphtha Imports Plunge 47 Percent Amid Strait of Hormuz Closure
Global Crude Prices Retreat Below $96 as Gulf Tensions Momentarily Ease
Generative AI Outperforms Human Baselines in Landmark Global Creativity Study
NASA Partners With Private Aerospace to Unveil Permanent Lunar Base Architecture
South Korean Equity Markets Surge on Next-Generation Memory Chip Frenzy
×