Amazon, Apple and Google raise fees in response to new digital taxes

Get a free Techzine subscription!

Three of the biggest tech companies are raising some of their service fees after digital taxes were implemented in some countries. Apple and Google put out statements separately on September 2.

In the statements, they said that they are passing on the cost of these taxes to their customers. On Wednesday, Amazon increased some of the fees in their supply chain to third-party merchants, also in a reponse to the digital sales taxes.

Different rates per country

In April, the U.K. introduced a Digital Services Tax that amounts 2% of the revenues that search engines, online markets, and social media platforms make on their customers. The tax targets explicitly the largest tech firms with worldwide revenues that exceed 500 million pounds and U.K. sales of at least 25 million pounds. Other countries are applying similar taxes.

France and Italy have already introduced digital taxes. Apple said that they would start applying the new levies to developer’s app revenues within days. The tech giant will begin to deduct the tax before they take their cut from app sales, which means that they will shoulder some of the cost.

Customers pay the tax

Google said that it would pass the digital tax cost to customers of the advertising service by increasing the cost of ad prices by 2%. In the statement, they said that the cost of digital service taxes increases the cost of advertising.

Usually, such costs are shifted to customers, and like other tech giants, Google is increasing their prices. They said that they would continue to pay all the taxes levied in the U.K. and encourage other governments to focus on tax reforms instead of introducing new unilateral levies.