In the UK the debate around what to do with large multinational corporations that make plenty of money but don’t pay any corporation tax in the UK rumbles on. Apple, Amazon, Google and Starbucks have been in the firing line with politicians lining up to criticise the practice of domiciling a European operation in the lowest tax location and then using inter-company charging to ensure that profit is only materialised in the lowest tax domain (normally Ireland or Luxembourg)
The Daily Mail reports today:
Ex-UK [Starbucks] boss Cliff Burrows who now oversees the firm’s Americas operation and has shares worth £7.2million, earned £6.5million. UK director John Culver was paid £3.8million over two years and owns £4.7million in shares.
Last week Starbucks, Amazon and Google were slammed over measures they have taken, within the law, to reduce their tax liabilities. Bosses of the three giants were grilled by MPs over how they managed to pay little or no corporation tax on their UK operations. All three denied they were engaged in aggressive tax avoidance.
Business secretary Vince Cable yesterday indicated that action can be expected from Chancellor George Osborne, who delivers his Autumn statement on December 5.
Speaking on BBC1, Mr Cable told The Andrew Marr Show: ‘Our own tax authorities have got to be very tough on things like royalty payments, which is where a lot of the subterfuge takes place.’ He said it was ‘completely unacceptable where there is systematic abuse taking place’.
It would be great if one politician had the courage to come forward with the truth. We live in a globalised economy. If you want the tax income, you have to reduce your tax rates to beat the competing countries - otherwise moan all you want but the world’s biggest and best will just locate (and pay their taxes) elsewhere.
JR