Forty-Fourth Report - The Digital Services Tax
Select Committee
Public Accounts Committee
HC 732
5 April 2023
Government response
Treasury minutes: Government response to the Committee of Public Accounts on the Forty fourth report from Session 2022-23 · published 27 Jun 2023
Recommendations & Conclusions
7 results
3
Recommendation
Acknowledged
There are obvious challenges facing the OECD in implementing the multilateral Pillar One reforms to...
Recommendation
There are obvious challenges facing the OECD in implementing the multilateral Pillar One reforms to the planned timetable, which could have major implications for the future of the Digital Services Tax. Some other countries, including France for example, have also …
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Government Response Summary
The government agrees and reiterates the target implementation date is 2024, describing Amount A of Pillar One and stating that Parliament will be able to scrutinise and ratify the convention through normal Parliamentary procedures before Amount A of Pillar One is implemented.
HM Treasury
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1
Conclusion
Acknowledged
On the basis of a report by the Comptroller and Auditor General, we took evidence...
Conclusion
On the basis of a report by the Comptroller and Auditor General, we took evidence from HM Treasury and HM Revenue & Customs (HMRC) on the Digital Services Tax.1 The government introduced the Digital Services Tax in April 2020 because …
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Government Response Summary
The government acknowledges the committee's conclusion by summarizing the Digital Services Tax and its intended purpose as an interim solution until the OECD reforms are introduced.
HM Treasury
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6
Conclusion
Acknowledged
The Digital Services Tax is an interim solution to meet a perceived a lack of...
Conclusion
The Digital Services Tax is an interim solution to meet a perceived a lack of ‘fairness’ in the current system, and is not on its own intended to deliver a ‘fair’ system, or to level the playing field between online …
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Government Response Summary
The government acknowledges the committee's conclusion, stating that the DST is a pragmatic interim solution focused on businesses for which the policy concern is most relevant and administrative burdens are considered manageable, and that tax policy is kept under constant review.
HM Treasury
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7
Conclusion
Acknowledged
HMRC did not take the view that the tax was significant enough to have a...
Conclusion
HMRC did not take the view that the tax was significant enough to have a noticeable additional burden on businesses. However, evidence submitted to us by one travel business complained of the greater impact on those operating high-volume, low-margin businesses.18 …
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Government Response Summary
The government acknowledges the committee's conclusion, stating that the DST is a pragmatic interim solution focused on businesses for which the policy concern is most relevant and administrative burdens are considered manageable, and that tax policy is kept under constant review.
HM Treasury
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8
Conclusion
Acknowledged
Since 2013, the Organisation for Economic Co-operation and Development (OECD) and the G20 group have...
Conclusion
Since 2013, the Organisation for Economic Co-operation and Development (OECD) and the G20 group have worked together under the ‘Base Erosion and Profit Shifting’ project, and subsequently with around 140 countries and tax jurisdictions under the ‘Inclusive Framework on Base …
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Government Response Summary
The government's response describes Amount A and Amount B of Pillar One of the OECD reforms.
HM Treasury
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9
Conclusion
Acknowledged
The Digital Services Tax is intended to fill the gap until the implementation of Pillar...
Conclusion
The Digital Services Tax is intended to fill the gap until the implementation of Pillar One, albeit as a ‘second-best’ solution.23 Other countries have also introduced a Digital Services Tax, including France, Italy, Spain and Austria.24 HM Treasury told us …
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Government Response Summary
The government acknowledges the committee's conclusion, stating that the DST is a pragmatic interim solution focused on businesses for which the policy concern is most relevant and administrative burdens are considered manageable, and that tax policy is kept under constant review.
HM Treasury
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12
Conclusion
Acknowledged
Legislative decisions, implementation decisions and the operation of compliance regimes for Pillars One and Two...
Conclusion
Legislative decisions, implementation decisions and the operation of compliance regimes for Pillars One and Two will be carried out in line with agreed conventions and frameworks.34 In July 2022 the OECD announced that the multilateral convention which will implement Pillar …
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Government Response Summary
The government agrees with the committee's observation, reiterating the aim to finalise Pillar One rules in 2023 and the process for its global implementation, including parliamentary scrutiny.
HM Treasury
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