New corporate tax measures aimed at preventing multinational companies making profits in the UK and then shifting them overseas where they incur lower taxes could potentially impact a number of tech companies, including Google, Apple and Amazon.
Dubbed “the Google tax,” the British government announced a new 25% tax on profits generated in the UK and then “artificially shifted” overseas, reports the BBC …
Chancellor George Osborne announced the new tax as part of the government’s Autumn Statement, an annual review of spending and taxation, specifically mentioning the tech sector, though not naming particular companies.
Some of the largest companies in the world, including those in the tech sector, use elaborate structures to avoid paying taxes.
Today I am introducing a 25% tax on profits generated by multinationals from economic activity here in the UK which they then artificially shift out of the country.
Google’s tax arrangements came under particular fire in the UK last year when it was revealed that the company paid just £6M ($9.4M) on a UK turnover of £395M ($620M), claiming that all its advertising sales were made by staff in Ireland. A Reuters investigation led to Google being called back in front of a government committee to determine whether it had been “economical with the truth” in making that claim.
Google had earlier been criticized by the British government after Google’s Eric Schmidt had said that he was proud of the company’s tax avoidance arrangements.
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