Google and Amazon tax investigation – profits scrutinised

Dec 3, 2012 | Regulation

Public outcry in Britain as journalists uncover the scale of how Google and Amazon reduce taxes to boost overall profits. New funding being given to support the Google tax investigation which could impact other multinational online service providers… Amazon, the online retail giant, reportedly paid just £1.8m in tax despite making £3.4bn in sales in […]

Public outcry in Britain as journalists uncover the scale of how Google and Amazon reduce taxes to boost overall profits. New funding being given to support the Google tax investigation which could impact other multinational online service providers…


Amazon, the online retail giant, reportedly paid just £1.8m in tax despite making £3.4bn in sales in Britain, while internet search engine Google is said to have paid £6m in tax on sales of £2.5bn.
The UK government’s latest attempt to make people and companies pay their fair share of tax will involve targeting the Swiss bank accounts of the well-off and tackling so-called “transfer pricing”, whereby companies legally arrange their international transactions so they pay as little tax as possible.
The full details of the plans will be revealed in Wednesday’s Autumn Statement.
The Chancellor will announce an array of measures, costing £154 million over the next two years, which will focus extra enforcement resources and technology on multinationals, the wealthy and offshore evasion. The Treasury believes the move will bring in an extra £5bn by 2015.
“International tax law was designed in a Pre-Internet age”, explains Treasury chief secretary, Danny Alexander. “And we will introduce a tax abuse rule in 2013”.
“The Government is clear that while most taxpayers are doing their bit to help us balance the books, it is unacceptable for a minority to avoid paying their fair share, sometimes by breaking the law,” said UK Chancellor George Osborne. “We are determined to tackle this problem and HMRC is making good progress but we are giving them additional tools to bring in more.”
Alexander added: “In restoring the public finances, our first priority must be to tackle those who avoid or evade tax. It is simply not fair that at a time when most people are making a contribution to balancing the nation’s books, there is a small minority of taxpayers who try to escape their responsibility.”
The move coincides with the publication of a report from MPs in which they accuse Starbucks, Google and Amazon of “immorally” minimising their UK tax bills.
Yesterday, Starbucks announced it was looking at its “tax approach” in Britain in the wake of fierce criticism for paying no corporation tax on its profits during the last three years. In October, it emerged the US coffee giant, which has generated sales in excess of £3bn in the UK since 1998, has paid less than 1% in corporation tax.