Monday, December 3, 2012

Google Inc (NASDAQ:GOOG) and Amazon.com, Inc. (NASDAQ:AMZN) criticized by MPs for “immoral” tax avoidance

Google Inc(NASDAQ:GOOG), Amazon.com, Inc.(NASDAQ:AMZN) and Starbucks Corporation(NASDAQ:SBUX) have been accused of an "immoral" use of secretive jurisdictions, royalties and complex company structures to avoid paying tax in the UK by a committee of MPs. Starbucks, the Coffee giant, also received criticism in the report but has agreed to review its UK tax approach.
A report released by the House of Common’s Public Accounts Committee (PAC), criticizes HM Revenue & Customs for being "way too lenient" in negotiations with corporations which pay little or no corporation tax. It calls on the government to draw up laws to close loopholes and name and shame companies that fail to pay their fair share.
According to the PAC, Amazon generated £3.35bn of UK sales last year, which was a quarter of all its international sales outside the US, and hires 15,000 UK staff, yet pays "virtually no corporation tax". Google's Irish tax have recorded revenues of £396m in the UK, but paid only £6m towards Corporation Tax.
The PAC blamed HM Revenue and Customs for allowing big businesses and their aggressive tax planning to escape without paying corporation tax. For example, the PAC said while HMRC had collected £4.5bn more tax this year than it had done in 2010 to 2011, there was a decrease in corporation tax revenue of £6.3bn.
The PAC even questioned HMRC if they were giving lenient treatment to big corporations, of which many had head offices overseas. The PAC suggested that HMRC should improve its risk profiling of taxpayers by improving its business intelligence systems.

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