Amazon was down 9 percent, touching six-month reduced, while Google was off 5.5 percentage and Facebook was trading lower 3.5 percent.
Netflix and Apple, the others in the so-called FAANG group of shares, were down 8 percent and 3.6 percent respectively.
“It is clearly not sustainable, or honest, that electronic platform companies may create significant value in the UK without paying tax in respect of that firm,” finance minister Philip Hammond said in his annual budget address on Monday.
The tax will be made to make sure established tech giants, instead of start-ups, shoulder the weight, Hammond informed parliament.
The Treasury said profitable companies would be taxed at 2% on the money they make from UK users from April 2020, along with the measure was expected to raise more than GBP 400 million ($512 million) annually. The tax will be based on self-assessment from the firms.
“A tax take of 400 million pounds or so may look a little amount when you believe Amazon alone is expected to post earnings of $233 billion (approximately Rs. 17 lakh crores) this year.
Big Internet companies, which say that they follow tax principles, had previously paid tax in Europe, generally by channelling sales via countries like Ireland and Luxembourg which have light-touch tax regimes.
Both Google and Facebook have changed the way that they account for their action in Britain.
In 2016, Facebook started recording revenue from its UK clients encouraged by local sales teams, and subjecting any taxable gain on the income to UK corporation tax.
But a number of offsets meant Facebook needed a tax fee for 2016 in Britain of 5.1 million pounds compared with 4.2 million pounds to 2015.
Slow international push
The taxation will target platforms such as search engines, social networking and online marketplaces, Hammond stated, and it’ll be compensated by businesses that generate at least 500 million pounds per year in global earnings.
Britain was leading attempts to reform international company tax systems, Hammond said, but progress had been painfully slow and authorities could not simply talk indefinitely.
Clifford Chance tax associate Dan Neidle stated the revolutionary nature of the proposal certainly showed that Britain was becoming frustrated with the slow pace of change in global tax laws.
“The UK is running ahead of another nation except Spain,” he explained.
But given the dominance of US tech giants, President Donald Trump’s administration might not appreciate the proposal in a time when Britain is trying to agree new trade prices.
The European Commission suggested in March the EU nations would charge a 3 percent levy on digital revenues of large businesses like Google and Facebook.
However, the strategy is opposed by smaller nations such as Ireland, which fears losing revenues, and by Nordic authorities which think the tax may stifle innovation and activate retaliation in the United States – the home to most of those companies which could be hit by the proposed tax.
France, which supports a new levy, put forward last month the concept that such a tax could have a”sunset clause”, meaning the tax would end when a global solution is found.
Hammond said on Monday that when a worldwide solution emerges, Britain would consider adopting this rather of its levy.
However, in the meantime, the government would consult with the detail to be certain it got its plan right, then ensure Britain remained among the finest places to begin and scale a tech business.
Amazon and Netflix declined to comment.
Facebook said it looked forward to receiving more information about the suggestions, and till then it was too premature to comment.