Tuesday, November 13, 2012

Google Inc (NASDAQ:GOOG), Starbucks SBUX), And Amazon.com (AMZN)To Be Confronted By UK Lawmakers Over Tax Issues

Lawmakers in the UK will be quizzing executives of Google Inc(NASDAQ:GOOG), Amazon.com, Inc.(NASDAQ:AMZN) and Starbucks Corporation(NASDAQ:SBUX) on Monday on how they have managed to pay only meager amounts of tax in Britain while saving sales worth billions of dollars.

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The Public Accounts Committee is in-charge of monitoring government financial matters. It has sent invitation to companies to present evidence in the wake of increasing political and public concerns regarding tax avoidance by reputed international companies.

A member of parliament for the opposition Labour Party, Margaret Hodge said that it is difficult for the ordinary people to believe it is a fair practice. It makes people angry beyond limits in the present fiscal climate. She said so referring to the austerity measures that large budget deficits have dawned upon the United Kingdom and many other countries.

Germany and Britain have declared last week that they have plans of pushing Group of 20 economic powers to make multinational companies to pay their share of taxes after there were reports of large companies taking undue advantage of loopholes to avoid paying taxes.

Reuters had reported last month that Starbucks had paid zero corporation and income tax in the UK in the last three years. It has paid only 8.6 million pounds on totality as part of UK tax over a span of 13 years.
Campaign group UK Uncut is opposed to government austerity measures. It has organized a number of protests against Boots and Vodafone over their tax practices. It mentioned in a statement that it had plans of targeting Starbucks.

The biggest coffee chain the world has said that it has complied with the tax regulations of every country it operates in and it has sought to pay its own share of tax amounts.

Amazon avoids UK taxes by reporting European sales through a unit in Luxembourg.

Google’s filings revealed that it had $4 billion of sales in the UK the previous year. However, since it had a group-wide profit margin of 33%, it’s main unit in the UK had a tax charge of 3.4 million pounds in the year 2011.

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