Tuesday, December 4, 2012
The British government announced plans on Monday to crack down on tax dodgers as a parliamentary report criticized United States companies for what it described as tax avoidance.
George Osborne, the chancellor of the Exchequer, said he had earmarked an additional £77 million, or $123 million, for a campaign against “offshore evasion and avoidance by wealthy individuals and multinationals.” The push, the Treasury said in a statement, was expected to yield £2 billion in additional annual revenue.
Criticism is growing in Britain and elsewhere in Europe of the fiscal policies of several American companies that pay little tax on the billions of pounds and euros in sales that they generate in the region.
“Global companies with huge operations in the U.K., generating significant amounts of income, are getting away with paying little or no corporation tax here,” Margaret Hodge, chairwoman of the Public Accounts Committee of Parliament, said in a report published Monday. “This is outrageous and an insult to British businesses and individuals who pay their fair share.”
The report focused on the tax practices of Starbucks, Amazon and Google, criticizing their policy of using lower-tax jurisdictions within Europe, like Ireland, Luxembourg and Switzerland, to record much of the revenue they generate in higher-tax countries like Britain, France and Germany. Companies like Google then transfer money they earn in Europe to Bermuda or other places, thus deferring or avoiding United States taxes as well.
(Hat Tip: Mike Talbert.)