Britain said it would tax the revenue that online platforms such as Google, Facebook and Amazon make in the country to update a system that had not kept pace with changing digital business models.
"It's clearly not sustainable, or fair, that digital platform businesses can generate substantial value in the U.K. without paying tax here in respect of that business," finance minister Philip Hammond said in his annual budget speech on Monday.
The tax will be designed to ensure established tech giants, rather than start-ups, shoulder the burden, Hammond told parliament.
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