On 1 December 2017, the UK government published a consultation setting out the circumstances in which it considers that the payment of royalties, made to certain persons not resident in the UK in respect of the exploitation of intellectual property or rights in the UK, will have a liability to income withholding tax. The proposals build on changes introduced in 2016 and further expand the concept of ‘UK source’. The consultation is especially important because it helps illuminate the UK government’s thinking on how to tax an increasingly digitalised global economy, where some classical principles of tax policy have struggled to have continued relevance.
On 1 December 2017, the UK government published a consultation setting out the circumstances in which it considers that the payment of royalties, made to certain persons not resident in the UK in respect of the exploitation of intellectual property or rights in the UK, will have a liability to income withholding tax. The proposals build on changes introduced in 2016 and further expand the concept of ‘UK source’. The consultation is especially important because it helps illuminate the UK government’s thinking on how to tax an increasingly digitalised global economy, where some classical principles of tax policy have struggled to have continued relevance.