From April 2020, the UK intends to introduce a digital services tax (DST) for social media companies, certain online marketplaces and internet search engines. This 2% tax applies to revenues attributable to "UK users" – but what does this mean?

The draft legislation, published on 11 July 2019, defines a "UK user" as any "person" who it is reasonable to assume, in the case of an individual, is normally in the UK and, in any other case, is established in the UK.

"Person" suggests that this includes only legal or natural persons but the draft guidance on the meaning of a user includes "anyone using the platform or DST activity", including individuals, legal persons and "other arrangements". It's unclear what this means for social media platforms which have accounts for groups or separate "pages" for those acting in an official or public capacity. Should Facebook count the page of Elton John (with its 6.5m followers) as a separate user from the private Facebook profile of Reginald Dwight?

Then there are "bot" accounts, that don't have an operator at all but could fall within the wide scope of "other arrangements". Although some bots (such as those which target real users maliciously or are set up to assist with fraud or identity theft) can be harmful, many encourage engagement with social media by automatically churning out content real users want to see.

Take the example of the Twitter bot that churns out Harry Potter titles for academic papers or another which generates a new genus of moth regularly – complete with images. The fact that they are driven by a piece of code should not necessarily exclude them from a place in the digital service eco-system. If bots are "users", though, there is always a possibility that they are used to drive an innovative type of tax avoidance: generate enough bot users outside the UK and the proportion of your revenue attributable to UK users should fall.

One further complication is that the definition refers to the user as the person or arrangement behind the account, not the account itself. This does not allow for both individuals and companies to open multiple accounts on the same platforms to use for different purposes or at different times, which is very common.

Sainsbury's, for example, has an official page on Facebook for many of its approximately 1,400 stores all of which may be attributable to Sainsbury's Supermarkets Limited as "user" – but the official page for Sainsbury's Bank should probably be attributed separately to Sainsbury's Bank plc.

Where platforms have the information and capacity, they may be able to link connected accounts to the same underlying person to identify a single user. In many cases, however, this will simply not be possible because the information is not in the public domain, and cannot be retrieved without platforms falling foul of privacy and data protection law or an unreasonable compliance burden.

As a result, a "user" with defunct but still accessible accounts or multiple accounts is likely to be counted repeatedly. While this double-counting would happen worldwide, the proportion of UK individuals who are users of social media platforms is higher than in many states and has been so for longer, which could disproportionately inflate the number of UK users.

HMRC's draft guidance on the meaning of user fits on one page and deals with none of these points – despite consultation responses bringing many of these concerns to their attention. Instead, they have left it to companies to judge for themselves what constitutes a "user".

For assistance from Taylor Wessing on how you can identify users on your platform, please contact Alice Thomas or Graham Samuel-Gibbon.