Amazon was down 9 percent, touching six-month low, while Google was off 5.5 percentage and Facebook was trading reduced 3.5 percent.
Netflix and Apple, others from the so-called FAANG set of stocks, were down 8% and 3.6% respectively.
“It’s obviously not sustainable, or fair, that electronic platform companies may create substantial value in the UK without paying tax here in respect of that business,” finance minister Philip Hammond said in his annual budget speech on Monday.
The tax will be made to make sure established tech giants, instead of start-ups, shoulder the burden, Hammond told parliament.
The Treasury said profitable companies would be taxed at 2 percent over the money they earn from UK users from April 2020, along with the amount was expected to raise more than GBP 400 million ($512 million) a year. The tax will be based on self-assessment from the firms.
“A tax benefit of 400 million pounds or so may look a little amount when you believe Amazon alone is expected to post sales of $233 billion (roughly Rs. 17 lakh crores) this past year.
Big Internet companies, that say that they follow tax rules, had previously paid tax in Europe, generally by channelling earnings via countries like Ireland and Luxembourg which have light-touch taxation regimes.
Both the Google and Facebook have shifted the way they account for their activity in Britain.
In 2016, Facebook started recording earnings from its UK customers supported by local sales teams, and subjecting any taxable profit on the income to UK corporation tax.
But a number of offsets meant Facebook had a tax charge for 2016 in Britain of 5.1 million pounds compared with 4.2 million pounds for 2015.
Slow international push
The tax will target platforms such as search engines, social media and online marketplaces,” Hammond said, and it’ll be paid by businesses that create at least 500 million pounds a year in global earnings.
Britain was leading efforts to reform global company tax systems, Hammond said, but progress was painfully slow and governments could not simply talk indefinitely.
Clifford Chance tax associate Dan Neidle said the revolutionary nature of this proposal clearly revealed that Britain has become frustrated with the slow pace of change in global tax laws.
The European Commission proposed in March the EU nations would charge a 3 percent levy on electronic revenues of large businesses like Google and Facebook.
But the strategy is opposed by smaller nations like Ireland, which fears losing revenues, and by Nordic governments which believe that the tax may stifle innovation and trigger retaliation from the United States – the home to most of those firms which could be hit by the proposed tax.
France, which affirms a new levy, put ahead the idea that this type of tax could have a”sunset clause”, meaning that the tax would finish when an international solution can be found.
Hammond said on Monday that when a global solution emerges, Britain would consider adopting this rather of its levy.
However, in the meantime, the authorities would consult on the detail to make certain it got its strategy right, and then ensure Britain remained among the finest places to start and scale a tech business.
Amazon and Netflix declined to comment.
Facebook said it looked forward to getting more information about the proposals, and till then it was too premature to comment.