Sunak calls on US to back digital tax as tech giants emerge stronger from pandemic

Sunak, along with other European finance ministers, cautioned that tech giants such as Amazon, Facebook and Google have become “more powerful and more profitable” during the pandemic and must “pay their fair share of tax”, the BBC has reported.

The US trade representative at negotiations reported to Congress that other countries wanted to “screw America”, prompting Sunak and his European counterparts to write a letter setting out their case. 

The letter said: “The current Covid-19 crisis has confirmed the need to deliver a fair and consistent allocation of profit made by multinationals operating without – or with little – physical taxable presence.

“The pandemic has accelerated a fundamental transformation in consumption habits and increased the use of digital services, consequently reinforcing digital business models’ dominant position and increasing their revenue at the expense of more traditional businesses.”

It went on: “Digital giants, no matter where they are headquartered, will emerge from the current crisis more powerful and more profitable.

“These companies benefit from free access to the European market. It is fair and legitimate to expect that they pay their fair share of tax within countries where they create value and profit.”