'Britain has unveiled plans for a 'digital services tax' that will target global tech giants such as Amazon and Google - putting Chancellor Philip Hammond on a collision course with President Trump.
The UK is pushing ahead with plans for a proposed 2 per cent levy targeting 'large digital businesses' next April that will net the Treasury around £400million by 2022.
Treasury minister Jesse Norman said: 'This targeted and proportionate digital services tax is designed to keep our tax system in this area both fair and competitive, pending a longer-term international settlement.'
The ministry published the planned bill on the same day France became the first major economy to impose such a levy, after its parliament passed a law mandating a 3 per cent tax on internet heavyweights' annual revenues.
The new tax prompted a furious response from Washington as President Trump lambasted France and ordered an investigation into the new levy.
The legislation - dubbed the GAFA tax - an acronym for Google, Apple, Facebook and Amazon - was passed by a simple show of hands in the Senate upper house after previously being passed by the National Assembly lower chamber.
The French move drew an angry response from Trump even before the legislation was passed, with the president ordering an investigation that the French economy minister said was unprecedented in the history of French-US relations.
And Trade Representative Robert Lighthizer said 'the United States is very concerned' about the digital services tax which 'unfairly targets American companies'.
But French Economy Minister Bruno Le Maire France rejected the US reaction saying 'threats' were not the way to resolve such disputes.'
Read more: Britain unveils its own tax on digital giants: Hammond risks clash with Trump after the US President threatened tariffs on France for introducing a similar levy
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