Regulation & ComplianceTax-dodging corporations under fire in autumn statement

Tax-dodging corporations under fire in autumn statement

George Osborne announced plans on Wednesday to target tax-dodging multinational corporations such as Google, Starbucks and Amazon.

George Osborne announced plans on Wednesday to target tax-dodging multinational corporations such as Google, Starbucks and Amazon.

In this week’s autumn statement, Osborne made a pledge to “make sure that multinational corporations pay their fair share” by introducing a 25 per cent tax. The move comes in response to growing outrage against big corporates who managed to avoid most of the tax on their earnings in the UK by moving profits to low-tax havens.

The tax will be levied on profits “from economic activity here in the UK which they then artificially shift out of the country” in April 2015, Osborne said. More information will be released on December 10th.

The chancellor hopes that new Diverted Profits Tax will raise more than 1 billion pounds ($1.6 billion) over the next five years, a fairly modest sum compared to the profit that Google, for example, makes yearly. The company made of $5.6 billion in the UK in 2013, with a profit margin of 25 per cent, or $1.4 billion, according to a Reuters report. That year, a tax bill of 25 per cent would have asked for $350 million – or £223 million – but the company paid £20.4.

Many foreign governments are also interested in overhauling international tax treaties to stop such companies shifting revenues to low-tax areas. Tax experts believe that the ploy would be difficult to enforce unilaterally, the report added.

Related Articles

Which transaction monitoring software is right for my institution?

Regulation & Compliance Which transaction monitoring software is right for my institution?

4w Elaine Dorkham
Bringing cryptocurrency to the front line  

Payments Bringing cryptocurrency to the front line  

4m Karen Vickers
China’s regulatory changes stimulate international interest

Asia Pacific China’s regulatory changes stimulate international interest

5m Michael McCaw
Treasury TV: Yeng Butler compares US and European MMF reforms

Compliance Treasury TV: Yeng Butler compares US and European MMF reforms

5m Victoria Beckett
AccessPay offers free tool to help corporates utilise PSD2

Payments AccessPay offers free tool to help corporates utilise PSD2

5m GTNews
Many treasurers juggle increased GDPR burden with business restructuring

More News Many treasurers juggle increased GDPR burden with business restructuring

6m Victoria Beckett
The arrival of PSD2: views from the market

Banking The arrival of PSD2: views from the market

6m Victoria Beckett
PSD2: dull name, but seismic effect

Clearing & Settlement PSD2: dull name, but seismic effect

6m Alex Kwiatkowski