New corporate tax measures aimed at preventing multinational companies making profits in the UK and then shifting them overseas where they incur lower taxes could potentially impact a number of tech companies, including Apple, Google and Amazon.
The British government announced a new 25% tax on profits generated in the UK and then “artificially shifted” overseas, reports the BBC …
Chancellor George Osborne announced the new tax as part of the government’s Autumn Statement, an annual review of spending and taxation, specifically mentioning the tech sector, though not naming particular companies.
Some of the largest companies in the world, including those in the tech sector, use elaborate structures to avoid paying taxes.
Today I am introducing a 25% tax on profits generated by multinationals from economic activity here in the UK which they then artificially shift out of the country.
The Financial Times reported last year that Apple’s three main British subsidiaries – Apple (UK), Apple Europe and Apple Retail UK – paid no corporation tax in 2012 despite reporting profits of £68m ($103m). Apple’s international tax arrangements had of course already come under scrutiny by the US Senate earlier that year.
The British government has also declared an intention to close a loophole by which Apple avoids having to charge 20% VAT (UK sales tax) on UK iTunes sales, a move planned to come into effect next year.
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