The UK will impose a 2% tax on online companies
This Digital Services Tax will start in 2020
The tax will raise an estimated £400 million ($500 million) per year
The U.K. has been pushing for online tax reform and is moving forward with a tax that will start in 2020. The government in Spain proposed a similar tax, but it is still going through the legislative process. In addition to Spain, twelve other countries are considering a digital tax to make online companies contribute more to government coffers.
As policies evolve, it is important to create a coordinated strategy of your pricing, annual contracts and distribution policies. Amazon sources millions of products from countries around the world and is now shipping to many countries. Each of Amazon’s marketplaces have different payment terms, agreements (damage allowance, freight allowance, marketing accrual, etc.), taxes, shipping costs and internal incentives (selection, profitability, etc.). What you do in one distribution agreement or geographic region can have a global impact.