Is the number up for Amazon, Google and Starbucks on tax?
Amazon, Starbucks and Google caused public outrage when it was revealed just how little tax they pay here despite making billions in sales.
On Friday, their number could be up…
An OECD report is being unveiled at the G20 meeting of finance ministers on Friday which could bring decisive action on corporate taxation.
British Prime Minister David Cameron had the first crack at the G8, but many people said it didn’t go half far enough.
Now Channel 4 News understands that the body governing international tax laws is readying a crackdown, closing the loopholes that allow large multinationals to, in some cases, pay less in corporation tax than they get in government grants.
On Friday, the OECD aims to crack the problem of large multinationals such as Amazon, Google and Starbucks from making billions in sales and associated profits, yet shifting those profits out of the UK to low tax jurisdictions or to places, in Google’s case, like Bermuda, where they pay no tax at all.
It’s a system which has ruffled many feathers – not least those who work for these huge companies, individuals who pay all of their tax bills all of the time.
What is transfer pricing?
Corporations reduce how much tax pay by taking advantage of a technique called “transfer pricing” – transferring profits from the place where goods are actually sold to countries where the tax rate is lower.
Google, for example, says all its UK sales are completed by staff in Ireland. Amazon routes its profits through Luxembourg while Starbucks is headquartered in Amsterdam.
By doing this, profits made in the UK cannot be taxed, costing us as much as £12 billion per year.
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