Tax Rebates & Refunds

Amazon, Google and Starbucks to be investigated over income tax

November 23, 2012
Posted in Income Tax — Written by Jennifer

The chief executives of corporations such as Starbucks, Amazon and Google have been criticised for avoiding paying their fair share of taxes, and have been asked to give evidence at the Public Accounts Committee (PAC).

The PAC, which is responsible for monitoring the financial affairs of the government and is looking into the situation, has heavily criticised executives of big companies which operate in the UK for tax avoidance. The pressure is on these businesses to pay their ‘fair share’ of tax on earnings, after it was revealed that:

• Starbucks has not paid corporation tax or income tax in Britain for the last three years, and has only paid a total of £8.6 million since 1998 (despite being a company worth billions of pounds)
• Amazon has recently received a demand for back taxes in France of $252 million, due to its practice of channelling European sales through Luxembourg

The Chief Financial Officer for Starbucks, Troy Alstead, was also quizzed by the committee on how it managed to report 13 years of losses in the UK. MP Austin Mitchell put it bluntly, saying:

“You’re either running the business badly, or there’s some fiddle going on,”

Both Britain and Germany have now announced plans to use the economic powers of the Group of 20 to force multinational companies to pay the right amount of tax to HMRC, which is the department responsible for tax rebates and calculating income tax for individuals as well as dealing with business tax affairs.

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