Royalty withholding tax: what it means for digital multinationals

As the government tries to curb tax leakage through royalties shifted offshore by multinationals with plans to introduce a withholding tax, Pinsent Masons partner Eloise Walker examines the policy’s chance of success and looks at some of the practical issues facing companies open to the charge

The new royalty withholding tax, announced by the Chancellor in the Budget, is the latest move by the UK to try to tax the UK-derived profits of the US tech multinationals. However, it is wider than just US tech companies and will potentially apply to any overseas group which is making sales in the UK without a UK permanent establishment and is paying royalties to a low tax jurisdiction offshore.

Your free features:

Breaking news and expert analysis
Customisable daily newsletters
Six free CPD learning modules each year
Personalised CPD tracker
Top 75 Firms league tables
Regulatory changes
Hardman’s Tax Data

Tax | Chancellor cuts VAT to 5% for kids’ meals, 10p rise in tax free mileage rate

Business | Top 75 Firms Survey 2026: private equity drives growth and M&A surge

Tax | Nine ways to beat the Budget tax tsunami

Tax | Half of £2bn Patent Box tax break goes to 10 companies

Navigate

Tax Services

Your free features:

Sign up to Business & Accountancy Daily