DST12600 - Definition of a Group for DST

DST is calculated by reference to the revenues a group derives from providing digital services activities to UK users. DST uses accounting principles to define the group.

The group for DST consists of either the parent entity and all subsidiary entities which are included in the consolidated accounts of the group if these accounts are prepared under one of the acceptable accounting standards, or an entity that is not a member of a group within the acceptable accounting standards. The acceptable accounting standards are:

• International Accounting Standards (IAS)
• The generally accepted accounting practice and principles of
  • UK
  • Canada
  • China
  • Japan
  • South Korea
  • US

If a group does not prepare consolidated accounts under one of these standards, the group consists of all entities that would be included if consolidated accounts were prepared under International Accounting Standards (IAS).

This definition means both UK resident and non-resident entities are members of the group. This ensures that all revenues from Digital Services activities which are attributable to UK users are within the scope of DST.

Similarly, the definition ensures revenues earned by non-corporate entities in the group, like partnerships or trusts, are within the scope of DST.

Also, single non-consolidated companies are considered groups for the purposes of DST and may be liable to the charge to tax.