Tags: UK | tax | probes | US

UK Probes Tax Payments by US Companies

Tuesday, 06 Nov 2012 07:52 AM

By John Morgan

Three big U.S. companies — Starbucks, Google and Amazon — could face an investigation by U.K. Treasury officials for alleged U.K. tax avoidance, The Telegraph reported.

The U.K. Treasury Select Committee is currently investigating the tax status of large multinational corporations doing business there. The companies could be called to account for their tax payments by early next year, the newspaper said.

The investigation is focused on an effort to ensure multinational profits are not being diverted from the United Kingdom to lower-tax jurisdictions.

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

“Ordinary people and small businesses, who always pay their taxes, are furious that big corporations find ways to wriggle out of paying their fair share. It is not right,” said Margaret Hodge, chair of the U.K. Public Accounts Committee.

The Telegraph said executives from Starbucks, Amazon and Google could be questioned by members of Parliament “within days” as part of the escalating controversy.

Apple shifts money through subsidiaries to low-tax countries and tax havens, according to the newspaper. Starbucks has paid no corporation tax in the United Kingdom in three years, while Amazon, Facebook and Google have together paid less than 48 million in taxes on billions in U.K. income in the past four years, the newspaper said.

“The U.K. tax regime is so complex that it is much easier for highly paid lawyers and accountants to devises ways to avoid tax — all within the law,” Hodge said.

BrandChannel.com, which follows global marketing issues, reported that Starbucks, in particular, has attracted attention for boasting about its profitable U.K. operations to investors and analysts while paying no income tax there in recent years.

According to BrandChannel.com, Starbucks argues that it has paid taxes “to the letter of the law,” but that U.K. tax laws might be the real source of the problem.

Since 2009, at least 10 U.S. public companies have moved their incorporation address abroad, according to The Wall Street Journal. One big reason cited by the newspaper: taxes.

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

© 2015 Moneynews. All rights reserved.

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