Chancellor Osborne Introduces New 25% Google Tax
American multinationals are about to be hit hard by Chancellor Of The Exchequer George Osborne. He intends to punish tax avoidance with a new 25% google tax on profits that are generated in the United Kingdom and then “artificially shifted” abroad in an attempt to avoid large sums of tax. The new levy is being referred to as “the Google tax” and was announced in Osborne’s autumn statement. The multinationals that he has targeted are the likes of Google, Amazon and Apple. He has been quoted as saying “We will make sure that big multinational businesses pay their fair share.”
George Osborne has referred to these new taxation rules as the “diverted profits tax” and they will come into effect in April 2015. They have been created to hit companies that use artificial structures in order to minimise their profits within the UK side of their business so they are liable for significantly less tax than they should be.
Although nothing has been set in stone a Treasury briefing note says: “If a company conducts a lot of activity in the UK – sales, for example – but can avoid paying corporation tax by moving profits generated in the UK to other countries through the manipulation of the international tax rules, the UK will now be able to tax those profits at a rate of 25%.”
On top of that Osborne said “Some of the largest companies in the world, including those in the tech sector, use elaborate structures to avoid paying taxes. Today we’re putting a stop to it.”