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UK accuses Starbucks, Amazon, Google for ‘practicing tax avoidance’

Last Updated: Tuesday, November 13, 2012 - 15:47

London: British authorities have reportedly accused Amazon, Google and Starbucks of being “immoral”, “manipulative” and of “practising tax avoidance on an industrial scale”.

The firms were branded a disgrace by British MPs who uncovered information about Starbucks’ “sweetheart deal” with Dutch tax authorities and attacked Amazon in the face of revelations about a 252 million dollars French tax probe.

According to the Telegraph, the fiery exchange, led by UK Public Accounts Committee chairman Margaret Hodge, saw all three companies accused of siphoning profits away from Britain by using a complex web of accounting strategies that were cynical and “unjust”.

“We are not accusing you of being illegal. We are accusing you of being immoral,” the paper quoted Hodge, as saying.

The lawmakers also expressed shock at revelations that Starbucks had signed a secret deal in the Netherlands, where it has its European headquaters, to pay a discount rate of corporation tax.

According to the paper, despite having its warehouses in the UK and employing 15,000 people, Amazon drives all of its sales through Luxembourg.

Andrew Cecil, head of public policy at Amazon, was lambasted by Hodge for avoiding the Committee’s questions.

Conservative MP Charlie Elphicke, who has been leading the criticism of US companies avoiding tax, pointed out that Google’s tax charge for 2011 was 2.6 billion dollars globally, on income of 12.3 billion dollars.

Elphicke said that equates to 21% tax rate. However, when you look at Google’s foreign income before tax of 7.6 billion dollars only 248 million dollars of tax was paid, the equivalent of 3.25%.


First Published: Tuesday, November 13, 2012 - 11:03
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