Companies that carry on a “digital services activity” and provide those services to UK users where:
- Worldwide “digital services revenues” exceeds £500 million; and
- More than £25 million of those revenues are derived from UK users;
are taxable persons for the purposes of DST.
Digital services revenues are those revenues that arise in connection with a digital services activity.
In order to determine the figures above and, therefore, the liability to the UK DST, the thresholds must be calculated at a group level. The group consists of all entities that are included in the group consolidated accounts. Therefore, digital services revenue of all group entities counts towards the DST thresholds even where they do not have a UK taxable presence for corporation tax purposes.