Large tech companies may be able to bypass Digital Services Tax, committee warns

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11 Apr 2023

The Public Accounts Committee (PAC) has warned the government that big technology companies may be able to use resources and expertise at their disposal to circumvent the Digital Services Tax (DST).

In a recent report, the PAC labelled the DST a 'temporary blunt instrument tax' which may be in place 'much longer than envisioned'.

The DST was originally designed as an interim measure whilst the Organisation for Economic Co-operation and Development (OECD) works on implementing a more complex international tax agreement.

The PAC stated that it is concerned that delays to implementation may motivate large multinational businesses in the scope of the DST to consider avoiding it.

Commenting on the issue, Sarah Olney MP, lead on the inquiry, said: 'We were very pleased to see HMRC finally getting to grips with the realities of taxing multinational corporations after years of PAC recommendations on this. But the Revenue needs to up its game on compliance - especially across jurisdictions - about how the tax will actually operate, over what will likely be years more before a proper international tax is fully operational.'