The UK and France are planning to introduce a digital services tax on tech firms targeting the largest internet companies such as Google, Apple, Facebook and Amazon.

As part of its Finance Bill published yesterday, the UK government announced that from 1 April 2020, it will introduce a new 2% tax on the revenues of search engines, social media platforms and online marketplaces which derive value from UK users.

The tech giants will be liable to the digital services tax when the group’s worldwide revenues from these digital activities are more than £500 million and more than £25 million of these revenues are derived from UK users.

It is likely, that the online job advertising revenue from Linkedin and Indeed will be hit by the new tax as their global revenue exceeds the threshold, however, neither firm provides public disclosure of revenue derived in the UK.

In France, a 3% digital services tax was approved by French Parliament yesterday and will be levied on sales generated in the country from tech giants of more than €750 million globally and €25 million in France. The tax will retroactively take effect from the start of 2019.

The Guardian reports that the US government ordered an investigation into the tax. US officials have also considered imposing tariffs and other trade restrictions in France and the issue is likely to further exacerbate trade issues between the US and Europe.

French finance minister, Bruno Le Maire said the tax would target 30 companies, mostly American as well as companies from China, Spain, Germany and the UK.

France has pledged to drop its tax as soon as an international agreement is reached at the Organisation for Economic Co-operation and Development to overhaul decades-old cross-border tax rules for the digital era.