Apple 'among largest tax avoiders in US' - Senate committee

A few days ago Google claimed that the reason it seems to be paying low taxes outside of its home country is because the buklk of its taxes are paid in the US.  Apple obviously does not have the same excuse.

From - http://www.bbc.co.uk/news/business-22600984

Apple has been accused of being "among America's largest tax avoiders".

A Senate committee said Apple had used "a complex web of offshore entities" to avoid paying billions of dollars in US income taxes. But it said there was no indication the firm acted illegally.

Apple chief Tim Cook will go before the panel on Tuesday. In prepared testimony Apple said it did not use tax gimmicks.

The Irish Republic, home to three Apple subsidiaries, says it is not to blame for the firm's low tax payments.

The US Senate had said that Apple paid little or nothing on billions of dollars in profits placed in Irish subsidiaries.

"They are not issues that arise from the Irish taxation system," Deputy Prime Minister Eamon Gilmore told national broadcaster RTE when asked about the Senate committee report.

"They are issues that arise from the taxation systems in other jurisdictions and that is an issue that has to be addressed first of all in those jurisdictions."

Apple has a cash stockpile of $145bn (£95bn), but the Senate committee said $102bn of this was held offshore.

The company says it is one of the largest taxpayers in the US, having paid $6bn in federal corporate income tax in the 2012 fiscal year.

The Senate Permanent Subcommittee on Investigations has been examining "methods employed by multinational corporations to shift profits offshore".

Some large firms in the US have come under fire for their reluctance to repatriate their foreign earnings as they could face a top tax rate of 35%.

US corporation tax is one of the highest in the world at 35%. However, companies typically pay far less, thanks to numerous deductions and exemptions.

Continue reading the main storle has been accused of being "among America's largest tax avoiders".

'Google is cheating British taxpayers out of millions... what they are doing is just immoral': Web giant accused of running 'scandalous' tax avoidance scheme by whistleblower Read more: http://www.dailymail.co.uk/news/article-2326897/Google-tax-avoidance-row-Internet-giant-accused-scandalous-tax-avoidance-scheme-whistleblower.html#ixzz2TkN0odzA Follow us: @MailOnline on Twitter | DailyMail on Facebook

From - http://www.dailymail.co.uk/news/article-2326897/Google-tax-avoidance-row-Internet-giant-accused-scandalous-tax-avoidance-scheme-whistleblower.html

* Barney Jones said Google diverts British profits through Ireland to Bermuda 
* Former executive said company 'pulled the wool over the eyes' of HMRC
* Adds to mounting pressure on Google over its tax affairs 
* Company says all sales contracts go through its low-tax Ireland office 
* Last year, paid just £7.3million in corporation tax on UK turnover of £3billion

A former Google executive turned whistleblower says he has 100,000 emails that expose the 'immoral' tax avoidance scheme used by his former employer.

Barney Jones, who worked for Google from 2002 until 2006, said the company has 'pulled the wool over the eyes of HMRC and the British population'.

He claims Google has a system in place which diverts British profits through Ireland to the Bermuda tax haven and accused the company of 'cheating' the British taxpayer. 

The internet giant has been under increasing pressure about allegations of tax avoidance.

Prime Minister David Cameron will lead efforts at next month's G8 summit of world leaders to find ways of preventing multinational firms from exploiting tax loopholes.

He is due to meet Google's executive chairman Eric Schmidt tomorrow at the quarterly meeting of the prime minister's Business Advisory Group. 

Last week, Matt Brittin, a vice-president of Google, was aggressively questioned by MPs, who accused the company of 'doing evil' by using 'devious, calculated and unethical' tricks to minimise its liabilities.

It paid just £7.3million in corporation tax last year despite having a UK turnover of £3billion.

Yet, Google assert that all its sales are made in low-tax Ireland, rather than the UK, where corporation tax is just 12.5 per cent compared to 23 per cent in Britain. 

Mr Jones's earlier testimony to the PAC gave MPs such as chair Margaret Hodge further ammunition for the questioning of Mr Brittin last week.

Fury at corporate tax avoidance leads to call for a global response

From - http://www.guardian.co.uk/business/2013/may/18/corporate-tax-avoidance

Anger over the financial affairs of multinationals such as Google, Amazon and Starbucks is gathering momentum in Westminster. Now the UK is poised to lead the debate about international tax reform at next month's G8 summit.i

Google's approach to its taxes has been branded as evil by Margaret Hodge, chair of the public accounts committee. Photograph: John G Mabanglo/EPA

Huge orange and green cranes hover over a vast building site at King's Cross, London. Over the next three years, 2.4 acres of this site will be transformed into a million square feet of an 11-storey headquarters for the internet giant Google, no doubt chock-a-block with colourful Big Brother-house-style sofas and surreal chill-out zones that mark out its other 70 offices in 40 countries.

The property deal is estimated to have cost around £1bn and was heralded by the site's development consortium as the "most significant property transaction of recent years".

"This is a big investment by Google, we're committing further to the UK where computing and the web were invented. It's good news for Google, for London and for the UK," said Matt Brittin, vice-president for northern and central Europe, when the purchase was announced in January.

Like Amazon, Google is seeing increasing success in the UK where one in every $10 of sales is now generated. Yet both firms claim they are merely touching down on UK soil, without a "permanent establishment" and therefore are not paying tax on profits from billions of pounds worth of sales made here.

On Wednesday, Google won the advertiser of the year trophy at the 54th annual Clio Awards – the Oscars for advertising professionals. Accepting the award in New York, Robert Wong, chief creative officer of Google Creative Lab, said: "At the highest order, our job is to remind the world what it is they love about Google."

That popularity has hit a serious snag. The next day the company was branded "evil" by Margaret Hodge, chair of the public accounts committee, while this weekend Ed Miliband called it "irresponsible". "If everyone approached their tax affairs as some of these companies have approached theirs we wouldn't have a health service, we wouldn't have an education system," he said.

Along with Amazon and, before that, Starbucks, Topshop, Boots, Vodafone, Goldman Sachs and Greene King, Google is the latest to have become the target of grassroots hostility towards their aggressivetax avoidance policies. The actions of these corporations are not illegal, nor underhand, but especially when we're all supposed to be in austerity together, jarring horribly with public opinion.

Something "doesn't smell right", as the Guardian's editorial said this weekend, after it ran an account of the extent of Amazon's dealings in the UK, far wider than what its tax lawyers are implying.

The debate is now raging over whether these companies are the happy beneficiaries of a tax system knitted with loopholes, or the malicious purveyors of smoke-and-mirror accounting. HM Revenue and Customs claims the former – public opinion is rolling towards the latter. Lin Homer, chief executive of HMRC, claimed the public don't understand. Asked why she was not taking a tougher line with internet giants, she told the public accounts committee: "We see, but understand more fully, some of the information that might seem to the general public to be surprising."

But campaigners say tax collectors and leading politicians have been caught out; too engrossed in austerity plans, they are scrabbling to keep up with people who point out that there are other ways to balance the books.

"Without a doubt, they are behind the curve," said Richard Murphy, a chartered accountant, economist and founder of Tax Justice Network. "They have all been caught by surprise because this has come from civil society, a campaign that has been going on for almost a decade but has only been picked up by politicians after the banking crisis when they suddenly realised they were desperately short of cash."

He said HMRC had been ducking tax avoidance completely. He said it had powers to tackle any suspect tax returns of foreign-based companies. "If the breach is blatant, then they can act. What we haven't got is politicians who will stand up to this. It's a critical point. If the state will not stand up for its right to tax big corporations then we are in deep trouble."

UK Uncut began campaigning on the issue in 2010 and it was its legal challenge that revealed how HMRC waived a £20m bill for Goldman Sachs, as well as a £6bn bill to Vodafone. Journalists, tax experts and campaigners have been investigating and exposing the tax scams being perpetrated by big businesses for far longer – pointing out glaring loopholes in Britain's tax system.

When Matt Brittin of Google told the public accounts committee in November 2012 that Google did not have a sales presence in the UK, it was the news agency Reuters that quickly uncovered evidence to the contrary, resulting in Brittin being recalled in front of the committee on Thursday, where his company's behaviour was described as "devious, calculated and, in my view, unethical" by Margaret Hodge.

"You are a company that says you 'do no evil'. And I think that you do do evil," said Hodge, referring to Google's motto, "Don't be evil".

Amazon may also be recalled, after numerous whistleblowers from among its employees approached journalists to contest official accounts of its trading practices within Britain.

For the moment the government's line is that this is a global problem that cannot be solved unilaterally. On Monday, Google's executive chairman, Eric Schmidt, will meet David Cameron, a meeting No 10 insists is not about tax, but to do with Schmidt's role on the prime minister's business advisory group.

Labour leader Ed Miliband, who is due to give a speech to Google employees on Wednesday, has backed a "country by country" international scheme on tax declaration but says that he is concerned that no firm proposals have so far been put forward for the G8. "You have to have much greater transparency. Tax offices have to know country by country how much profit people are making, how much tax they are paying. Unless you know that you won't get to the bottom of what is happening. You have to deal with tax avoidance schemes. You have to deal with tax havens.

"We are saying there has to be a big, big push on this. It has to be done internationally and if it is not done internationally, Britain should act on its own."

All eyes will be on what, if anything, can be agreed at next month's G8 meeting in Scotland, where, as host of the event, David Cameron has pledged to put tax avoidance at the top of the agenda as he insists it is an issue for international co-operation rather than unilateral action.

And it would not be just the wealthy who would be watching the progress of the talks, said Melanie Ward, head of advocacy at ActionAid UK.

Amazon paid £3m tax on £4bn UK sales

From: http://www.guardian.co.uk/business/2013/may/15/amazon-uk-tax-3m

Online retailer's tax charge brings to £6m the total corporation tax raised from Amazon.co.uk in a decade

Amazon.co.uk paid £3m in tax. Photograph: Chris Radburn/PA

Amazon's main UK subsidiary paid just £3.2m in tax last year, according to accounts filed on Wednesday, despite overall UK sales of £4.2bn.

Amazon's taxes for last year are only marginally higher than the £2.5m the company received in government grants during the year, according to the annual accounts published at Companies House.

The revelation comes amid public unrest over the minimal contribution of Amazon and fellow digital giants Apple and Google to the British public purse, despite the important contribution UK sales make to their international revenues.

The online retailer's tax charge brings to £6m the total corporation tax raised from Amazon.co.uk Limited in a decade. The company's tax bill was £1.9m in 2011, but these sums may not actually be paid to HM Revenue and Customs because of cumulative losses across the Amazon group.

Amazon employed 4,191 people at the end of 2012 in the UK, and thousands more in its warehouses via contracting agencies, but reduced payments to the British government by routing sales via a subsidiary in Luxembourg.

The UK company declared a turnover of £320m for 2012, up 50% on 2011. However, its income is largely raised from other Amazon companies in return for services such as warehousing and distribution and negotiating purchasing deals with book publishers.

Amazon gives a fuller picture of its UK revenues on regulatory filings to US investors, and this data showed a growth in UK turnover of 20% during 2012, to $6.5bn (£4.2bn).

The company's UK filing states: the company recorded a profit before taxation of £10.8m in the current year and "is expected to remain profitable for the foreseeable future".

Liberal Democrat MP John Hemming said the figures showed the inadequacy of existing rules to tackle the problem of profit shifting by major corporations.

"The government clearly needs to do a detailed study on how to handle the tax implications of e-commerce," he told Reuters.

Nick Smith, a Labour MP, said he wanted the tax authorities to take a close look at Amazon, describing its tax payment as "pathetic".

"HMRC should be going through this company's tax arrangements with a fine-tooth comb," he said.

Osborne: G7 agree to target tax evasion and avoidanc

From: http://www.bbc.co.uk/news/business-22476233

The G7 group of industrialised nations have agreed that there must be collective action against tax evasion and avoidance, the UK's finance minister has said.

Chancellor George Osborne said after the talks that it was "incredibly important" that firms and individuals paid the tax they owed.

The members agreed on more policy issues than had been assumed, he added.

The G7 comprises the US, Germany, the UK, Japan, Italy, France and Canada.

In a news conference held jointly with Bank of England governor Sir Mervyn King, Mr Osborne said the finance ministers and central bank governors of the G7, meeting in Aylesbury, Buckinghamshire, had also agreed no bank should be "too big to fail".

Kofi Annan turns up heat on ENRC and Glencore in pursuit of Africa’s lost tax

From: http://www.thetimes.co.uk/tto/business/industries/naturalresources/article3760812.ece

Kofi Annan has called on Britain to use its presidency of the G8 to stamp out the “unconscionable” business practices of companies such as Glencore Xstrata and ENRC in Africa.

The Africa Progress Panel, chaired by the former Secretary-General of the United Nations, wants an international crackdown on tax avoidance with a particular push for transparency in the mining and oil sector, it said in a report.

ENRC and Glencore strongly deny any wrongdoing and said that they were not contacted by the Africa Progress Panel before the publication of its report. The panel estimates that Africa lost $63 billion (£40 billion) in tax revenues through illicit practices between 2008 and 2010 alone.

“It is unconscionable that some companies, often supported by dishonest officials, are using unethical tax avoidance, transfer pricing and anonymous company ownership to maximise their profits, while millions of Africans go without adequate nutrition, health and education,” the report said.

It highlights recent deals by ENRC, the miner being investigated by the Serious Fraud Office for “fraud, bribery and corruption”, and Glencore Xstrata in the Democratic Republic of Congo.

The report claims that assets were undervalued, costing the country an estimated $1.4 billion, a figure close to 10 per cent of its GDP.

The panel counts prominent executives and policymakers among its members, including Tidjane Thiam, the chief executive of Prudential, Robert Rubin, the former US Treasury Secretary, and Michel Camdessus, the former managing director of the IMF. Its donors include the UK Department for International Development and the Bill & Melinda Gates Foundation.

The panel’s criticism could focus the spotlight on Britain’s regulatory regime. Kevin Watkins, author of the report, asked why it had taken British authorities so long to investigate ENRC’s dealings in the DRC.

“We call on the G8 and the G20 to step up to the mark to show leadership,” the report read.

We pay £6m tax on £2.6bn UK profits, but that's OK because we help start-ups: Google

From the Independent: http://www.independent.co.uk/news/uk/home-news/we-pay-6m-tax-on-26bn-uk-profits-but-thats-ok-because-we-help-startups-google-boss-eric-schmidt-under-fire-over-comments-on-corporate-tax-8582605.html

Senior MPs called on David Cameron to consider stripping the boss of Google from his role as a government adviser tonight after he suggested that his company’s contribution to the British economy was more important than paying its fair share of tax.

Politicians from all three parties rounded on Google’s executive chairman, Eric Schmidt, after he defended its use of loopholes to minimise its UK tax bill. He insisted that Google would comply only with the letter of the law – despite paying only £6m of taxes on £2.6bn of revenue generated in the  UK in 2011. Google uses anomalies in international law to move profits into low-tax jurisdictions even if they have been generated by business carried out in Britain. Chancellor George Osborne has made tackling the practice a priority for Britain’s chairmanship of the G8.

But in an interview with the BBC, Mr Schmidt defended his company’s practice, suggesting that its contribution to the UK economy was more important than the tax it paid to the Exchequer. “We are investing heavily in Britain,” he said. “We power literally billions of pounds of start-ups through advertising networks and so forth, and we’re a key part of the electronic commerce expansion of Britain, which is driving a lot of economic growth for the country. So from our perspective, I think, you have to look at it in a totality.

“The people we employ in Britain are certainly paying British taxes, and more importantly, they’re British citizens and they’re driving a lot of GDP. I think the most important thing to say about our taxes is that we fully comply with the law, and well, obviously, should the law change we’ll comply with that as well.”

His comments were condemned by MPs, who pointed out that much of the investment in broadband internet infrastructure that had allowed Google to grow had been paid for by taxpayers.

Margaret Hodge, the chairman of the powerful Commons Public Accounts Committee (PAC), which carried out an investigation into the tax practices of multinational companies, said the Government should consider whether Mr Schmidt was an appropriate person to remain on its Business Advisory Group if Google maintained its tax position. “I think we should be careful who we talk to, and I think if people want to have the voice of Government, they have a responsibility to pay their fair share,” she said.

A government source also questioned Mr Schmidt’s position, claiming Google was “not really investing very much in Britain” and that the company had a “disproportionate influence” on Mr Cameron. “It’s a bit like The Wizard of Oz,” the source said. “From the outside, they appear terribly important and powerful but, when you look closely at what they are actually investing in Britain, it is pretty insubstantial.”

France's President Hollande: Eradicate tax havens

From - http://www.bbc.co.uk/news/world-europe-22094194

French President Francois Hollande has called for "eradication" of the world's tax havens and told French banks they must declare all of their subsidiaries.

He was speaking after presenting a draft law aimed at "moralising" French public life - a response to the tax scandal that has shaken his presidency.

France's ex-Budget Minister Jerome Cahuzac has been charged with fraud over a secret Swiss bank account.

Mr Hollande said a new central agency would fight fraud and corruption.

Earlier the French Socialist government set a deadline of 15 April for ministers to declare their assets, as part of the new transparency drive.

Mr Cahuzac admitted last week that he had hidden about 600,000 euros (£509,000; $770,000) in a Swiss bank account, causing shock in France. He has now been expelled from the Socialist Party for lying about his financial affairs.

Addressing a news conference on Wednesday, Mr Hollande said "tax havens must be eradicated in Europe and worldwide".

"I won't hesitate to consider as a tax haven any country that refuses to co-operate fully with France."

He said French banks "will have to publish every year the full list of their subsidiaries in the world, country by country". They will also have to explain their business, he said.

"In other words it won't be possible for a bank to hide transactions carried out in a tax haven."

===============================================================

Will work if only other major countries do the same.  Will they?

Barclays to close tax unit

From The Sunday Telegraph - http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9859934/Barclays-to-close-tax-unit.html

Barclays is to close its controversial tax avoidance unit as one of the landmark measures of Antony Jenkins’ much anticipated strategy review designed to show that “Barclays is changing”.

"The Sunday Telegraph can reveal that Mr Jenkins, who will deliver the outcome of the review on Tuesday, will say the bank will shut its structured capital markets (SCM) business.

In the mid-2000s the unit made profits of as much as £1bn in a single year and became synonymous with Barclays’ aggressive investment banking culture under the stewardship of Bob Diamond, Mr Jenkins’ predecessor as chief executive.

The unit, previously run by Barclays’ highest-paid banker, Roger Jenkins, who was paid as much as £40m a year as a result of SCM’s success, gave advice to large companies on how to avoid tax. SCM was responsible for building a network of almost 300 offshore tax-haven subsidiaries which meant Barclays itself paid only £113m of UK corporation tax in 2009, despite profits of £4.6bn.

The strategy review will be delivered at London’s Royal Horticultural Halls just hours after the bank’s full-year results for 2012, which are expected to show that Barclays will have made adjusted profits of £7.18bn, up from £5.88bn in 2011.

The review has seen Barclays split into 75 business units, each of which has been measured on the returns generated and the reputational impact of the specific activities."

Maybe other big banks and consultancies offering Tax Avoidance services will also close. Maybe pigs will fly!

British sugar giant caught in global tax scandal

From The Guardian - http://www.guardian.co.uk/business/2013/feb/09/british-sugar-giant-tax-scandal

One of Britain's biggest multinationals, whose brands include Silver Spoon sugar, Twinings Tea and Kingsmill bread, is avoiding paying millions of pounds of tax in an African state blighted by malnutrition, a year-long investigation revealed on Sunday.

The Zambian sugar-producing subsidiary of Associated British Foods, a FTSE100 company, contributed virtually no corporation tax to the state's exchequer between 2007 and 2012, and none at all for two of those years.

The firm, Zambia Sugar, has recently posted record pre-tax profits and its huge plantation is increasing its capacity to produce more sugar for markets in Europe and Africa. Yet it paid less than 0.5% of its $123m pre-tax profits in corporation tax between 2007 and 2012.

The company benefits from generous capital allowance and tax-relief schemes in Zambia, but the investigation also found that it funnels around a third of its pre-tax profits to sister companies in tax havens, including Ireland, Mauritius and the Netherlands. Tax treaties between Zambia and some of those countries mean the state's revenue authorities are unable to charge their normal tax on money leaving their shores.

The revelations are contained in a report published by ActionAid, which exposes how Zambia Sugar has kept its contribution to the state's exchequer so low, although the company says that globally it actually pays a higher rate of tax on its profits than it otherwise would due to its corporate structure.

It is estimated that the tax haven transactions of this one British headquartered multinational deprived Zambia of a sum 14 times larger than the UK aid provided to the country to combat hunger and food insecurity.

ActionAid's findings will heap more pressure on the chancellor, George Osborne, to make progress in closing gaps in international tax standards and tackling avoidance at the G20 meeting of world leaders this week and the G8 in June.

Charity raised £176m, good causes got £55,000

From The Times - http://www.thetimes.co.uk/tto/money/tax/article3673519.ece

One of Britain’s biggest charities is a front for tax avoidance, The Times can reveal.

Wealthy donors used the Cup Trust to avoid £46 million in tax in an extensive abuse of Gift Aid incentives designed to encourage charitable donations.

The registered charity raised £176 million between 2010 and 2011. In 2010 it attracted more donations than the Royal Society for the Protection of Birds, the British Heart Foundation or the Salvation Army.

But instead of using the money for its stated objective, to “improve the lives of young children and adults”, it carried out trades that artificially generated Gift Aid for donors to reduce their tax bills. Investors who “donated” £1 million to the Cup Trust, for example, would receive most of their money back — but still be entitled to claim Gift Aid worth between £250,000 and £375,000.

“Of all the tax avoidance schemes I have come across, this is perhaps the worst,” Margaret Hodge, chairwoman of the Public Accounts Committee, said. “I thought I was past being shocked, but this genuinely has shocked me.

“To exploit a mechanism designed to encourage charitable giving in order to avoid tax is just disgusting. The Charity Commission certainly has questions to answer about how such flagrant abuse was allowed to occur.”

The Cup Trust is only one of several tax schemes on the market that manipulate charity law, The Times has learnt. George Osborne, the Chancellor, introduced a cap of £50,000 on charitable tax relief last year after identifying widespread abuse. But an outcry from philanthropists persuaded the Government to change its mind.

“A lot of people thought Osborne was excessive, but this case just proves that something needs to be done,” John Hemming, chairman of the Charity Tax Group, said. “The public will mistrust charities when this sort of activity is undertaken. It’s up to the authorities to stop this.”

Charity experts questioned yesterday how the Charity Commissiongave the Cup Trust a clean bill of health, despite a two-year investigation into its “governance and activities.”

The regulator, which has had its budget cut by a third, failed to take action despite the charity’s accounts disclosing that it was controlled by Matthew Jenner, the boss of NT Advisors, a well-known tax avoidance firm whose initials stand for “No Tax”.

“The commission were and are wholly unable to tackle this huge abuse of the charitable sector,” one former Charity Commission employee said. “Usually they have one accountant spread across many, many cases with limited investigative time or ability to obtain documents.”

The Revenue admits it is “well aware” that many tax avoidance schemes involve Gift Aid, introduced in 1990 to allow charities to claim tax relief on all donations. Donors paying the higher 40 or 50 per cent rates of tax can also claim Gift Aid to reduce their tax bill to the basic rate of 20 per cent.

Mr Jenner exploited these rules by arranging for the Cup Trust to purchase huge yearly quantities of gilts, or government bonds. It is understood that the gilts were sold for a minimal sum via third parties to investors, who then sold them at market value and “donated” the proceeds to the Cup Trust.

The end result of the complex transaction was that investors could generate large Gift Aid claims that could shelter other income simply by paying fees to NT Advisors and making a nominal donation to charitable causes.

The Cup Trust made sure that it donated this nominal amount to other charities to fulfil its “charitable objective”. In 2010, a payment of £55,000, representing 0.03 per cent of the total donations, was transferred to six unnamed “UK registered charities”.

Other NT Advisors schemes have attracted hundreds of high-net worth investors including the BBC presenter Chris Moyles and the comedian Jimmy Carr, who was exposed by The Times last year for investing millions of pounds in an aggressive tax avoidance scheme called K2. There is no suggestion, however, that these individuals invested in the Cup Trust, “The Cup Trust is a scheme which appears to function simply as a mechanism for deriving tax relief based on the Gift Aid legislation,” Alastair McEwan, of Rebus Investment Solutions, said.

“The scheme itself is designed to generate significant Gift Aid, in the region of £46.4 million, despite the fact that very little of the money is actually being used for any charitable benefit.”

Another person, with knowledge of the scheme, said: “It was a tax planning strategy to mitigate higher-rate income with no economic loss to the individual.

“There is a ‘donation’ per client. But obviously there is a mismatch between the amount the individual claims and the amount the charity gets in its hands.”

It is understood that legal changes will now prevent the Cup Trust from raising future funds, but will not affect claims already made for tax relief. It is not known whether HMRC has disputed these.

Amazon 'lays waste' to the high street with record £14bn in Christmas sales

From Daily Mail - http://www.dailymail.co.uk/news/article-2269842/Amazon-lays-waste-high-street-record-14bn-Christmas-sales.html

Amazon set to announce record Christmas sales as high street struggles

• Internet store made £14 billion in worldwide sales in just three months
• Amazon has come under attack though for avoiding millions of pounds in tax

Amazon is set to announce record Christmas trading as it continues to ‘lay waste’ to the beleaguered high street.

In just three months the internet store made £14 billion in worldwide sales – with one tenth of that from UK shoppers.

But Amazon has been under attack for avoiding millions of pounds in taxes. Critics say this enables the company to slash prices and undercut rivals.

An estimated 17,500 high street jobs are at risk after 1,400 stores closed down over the Christmas period. And industry experts warn more retail failures could see one in five shops boarded up.

Household names including HMV, Jessops, Blockbuster and Comet have all collapsed into administration during the past two months.

Yet Amazon’s expected sales rise is an increase of almost a third compared with 2011.

Waterstone’s founder Tim Waterstone previously said Amazon had a ‘rude, contemptuous, arrogant and subversive’ attitude to competitors.

And John Lewis boss Andy Street has called for a ‘level playing field’ to stop it ‘out-trading’ rivals.

Amazon was also dubbed ‘immoral’ for avoiding tax by funnelling revenue to Luxembourg.

In 2011, the most recent year where figures are available, Amazon paid just £1.8 million despite raking in sales of £3.35 billion in the UK – a figure the firm tried to keep secret until it was exposed by MPs.

Starbucks threatens Cameron after 'unfair' tax attacks

From the Telegraph - http://www.telegraph.co.uk/news/politics/9829108/Starbucks-threatens-Cameron-after-unfair-tax-attacks.html

Starbucks has threatened to suspend millions of pounds of investment in Britain after what it described as constant and unfair attacks over its tax affairs by David Cameron and the Government.

Photo: Getty

Kris Engskov, the multinational’s UK managing director, demanded talks at Downing Street after the Prime Minister said tax-avoiding companies had to “wake up and smell the coffee”.

Mr Cameron’s use of the phrase at the World Economic Forum in Switzerland last week was taken as a direct attack on Starbucks which has been criticised for not paying corporation tax in Britain.

Mr Engskov was so concerned about the “politicisation” of the tax issue that he asked for the talks at No 10, where he met officials last Friday. Starbucks argues that it makes no profits in the UK and so is not required to pay the tax. “The PM is singling the business out for cheap shots, a company that, it should not be forgotten, has pledged to pay tax now and into the future,” said a source close to the firm.

The warning on investment comes amid concern among businesses that Government rhetoric on tax avoidance is hurting their image while their creation of jobs and wealth is not highlighted. Today, Boris Johnson, the Mayor of London, tells The Sunday Telegraph: “We should stop bashing wealth creation — such talk is absolute nonsense.”

The US coffee chain has found itself under regular attack after it was disclosed that since its arrival in Britain in 1998, it has paid £8.5 million in corporation tax, despite total sales of £3 billion. It said last month it had made a profit in only one year.

Apple stuffs $1bn a week into tax havens

From Sunday Times - http://www.thesundaytimes.co.uk/sto/business/Tech_and_Media/article1202350.ece

APPLE is stashing almost $1bn a week beyond the reach of the American taxman after ramping up efforts to slash its bill.

The Silicon Valley company squirrelled away more than $11bn (£7bn) in its warren of subsidiaries in low-tax countries and tax havens in the final three months of 2012.

This legitimate manoeuvre raises the amount of cash Apple has shielded from the American authorities to a colossal $94bn, according to documents filed last week. The revelation will inflame public anger over tax avoidance by large corporations, which is raging on both sides of the Atlantic.

Davos man thrives while the rest of us pay for his excesses

from - http://www.guardian.co.uk/commentisfree/2013/jan/20/davos-world-economic-forum-bad-capitalism?CMP=twt_gu

'Dynamism' is the World Economic Forum's watchword as the way out of the crisis and it is meaningless

• 
  
• • Will Hutton
  • The Observer, Sunday 20 January 2013
  • 
    

The village of Davos where the World Economic Forum meets. Photograph: Fabrice Coffrini/AFP/Getty Images

More than 2,500 alpha men and women from more than 100 countries will descend on Davos this week to spend four days discussing the world's urgent need to adopt "resilient dynamism". This, the organising watchword for this year's annual gathering of panjandrums at the World Economic Forum, is allegedly the way out of the crisis. It is meaningless.

Who, for example, would support non-resilient stagnation? Western capitalism, and, arguably, global capitalism, has arrived at an apparent dead end. It is in profound trouble. But if the best answer to austerity and economic malaise is resilient dynamism every delegate should stay at home. As a call to action, you might as well urge everyone to be manly, womanly and decisive. Virtuous states of mind, but hardly blueprints for action.

In any case, for most of the business leaders attending Davos, the economic malaise is an abstraction. Profits as a share of GDP in almost all western countries are at record highs, along with executive pay. Meanwhile, real wages for the majority are stagnating, if not falling, justified by our economic leaders in Davos as the proper if sad consequence of "structural adjustment". Goldman Sachs, for example, shamed from deferring its bonus payments into the next financial year so that its staff could enjoy the lower tax rate, has just enjoyed a bumper year. Davos men and women are prospering. No structural adjustment for them.

There will doubtless be the usual appeals for more free trade, more scientific research and more investment in skills as the expensively clad executives move from seminar and sonorous keynote speech to reception and back to the dinner table. But what there will not be at Davos is a willingness to countenance a sea change in the way capitalism is organised. It can do what it will and that is to continue to confer fortunes on those at the top, with little risk, while directing pain on to others.

The paradox is that the chief reason capitalism is in crisis is that without such challenges it has undermined its own dynamism and capacity for innovation. Instead, it merely offers enormous and unjustified self-enrichment for those at the top.

Nor does the malign impact of inequality stop there. I was stunned to read in a recent IMF working paper, with the hardly catchy title Income Inequality and Current Account Imbalances, that the whole – yes the whole – of the deterioration of the British current account deficit between the early 1970s and 2007 could be explained by the rise in British inequality. It is a similar, if less acute, story across the rest of the industrialised or, rather, deindustrialising west.

What the IMF team shows is that as the share of national income devoted to profits and top pay rises to its current levels, so a noxious economic dynamic is created. By definition, there is less of the pie available to the mass of wage earners, whose real wages become squeezed. To sustain their living standards, they borrow, which has been easier than ever over the past 40 years as banks take advantage of financial deregulation. Overall demand thus carries on growing, but at the price of sucking in imports and ever higher personal debt levels for ordinary wage earners.

Finally, the music stops, as it has now, as both debt and import levels become unsustainable. The state of play in Britain – crazy levels of private sector debt and a record trade deficit – can thus be explained by the rise of inequality. And one of the chief causes of that, the IMF believes, is the decline in trade union bargaining power!

Citizens arise! Give up your lattes and Kindles

Now we're talking sense. If the government cannot or will not act or is too slow in acting, 'citizen power' is the next best thing.

From - http://www.thetimes.co.uk/tto/opinion/columnists/alicethomson/article3599302.ece#:

"If Starbucks and Amazon wriggle out of paying tax here, customers must take a stand

They track you down if you’re a small business; hound you for every last penny. They’re utterly ruthless, the men from HMRC.

A friend set up the Crazy Baker café in Kensal Rise, West London, three years ago. Every morning she wakes at 4am to knead her sour dough spelt, often working 20-hour days, harder than any CEO, to produce amazing scones, cakes and brioche. She employs a full-time bookkeeper and an accountant, but is still terrified of getting her figures wrong and the taxman’s knock on the door.

Yet down the road are two Starbucks that don’t pay a penny of corporation tax. My complaint is not about their lattes, which are adequate, or their chocolate muffins, which are passable, but about their tax arrangements, which aren’t. Of course small cafés have to compete with the big boys, but then why should they be so disadvantaged?

This week Troy Alstead, the Global Chief Financial Officer of Starbucks, went in front of the Public Accounts Committee to explain why this poor multinational simply cannot pay any corporation tax. It doesn’t make any money in the UK, he said, not a bean for its beans. He wrung his hands, then smirked as he explained the company faces “profitability challenges”.

Although Starbucks has 790 UK stores, second only to McDonald’s in the restaurant trade, it has made a profit just once in 15 years in Britain. When asked how Costa Coffee, a smaller chain, managed to make £49.5 million profit last year and paid £15.5 million in taxes, he simply said: “It’s a failing.”

The MPs of the PAC couldn’t believe it. I listened to three hours of the siege of Troy but you only have to hear five minutes to get the gist that the way Starbucks manages its affairs through Amsterdam is, in the words of one MP, “specifically designed to avoid tax”.

Amazon and Google were grilled too. The man from Amazon insisted that although customers pay in pounds for its products, which are delivered from UK centres through the Royal Mail with a British stamp, it’s a Luxembourg company. At least Matt Brittin, the chief executive officer of Google UK, admitted that the company operates from Ireland and Bermuda because of their low corporation tax rates.

Starbucks tries to sound like the caring corporate. I’ve visited the original shop in Seattle, named after the first mate in Moby-Dick. It’s cosy with its “handcrafted beverages”. Its website says “businesses can and should have a positive impact on the communities they serve”. How does paying virtually no tax fit into this ethos? But you can’t blame Troy; executives have a duty to maximise shareholder return and if they can find a legitimate way not to pay tax, of course they will.

One of Bill Clinton’s most successful TV ads in the 1992 election was: “This is the $825 billion question. That’s how much foreign corporations operating in the US took in one year. But 72 per cent of them didn’t pay a dime in tax. Not one dime.” Ed Miliband could easily borrow the same tactics.

The Government is acting — slowly. George Osborne should demand that these giants are more transparent about their operations and the Revenue should establish a ranking of companies — the good taxpayer’s guide. The Chancellor is trying to clamp down on foreign tax havens and is talking to the Germans about a plan that could see companies taxed on the sales they make in each country.

But all that will take a long time, so now it’s up to us, the consumer. Costa pays tax, so go there or to other small businesses like the Crazy Baker. Or buy McDonald’s: at least it paid £80 million in corporation tax last year. Margaret Hodge, who chairs the PAC, said she felt so incensed by Amazon that she’s given up her Kindle.

Christmas will be tricky without Amazon. But we should boycott companies that don’t pay their fair share of tax. All multinationals are vulnerable to public opinion if they have a product to sell directly to us. If consumers put pressure on them, their executives will think: if we don’t start acting responsibly, our brand will be damaged.

It may be only the “little people” who pay taxes but they also drink coffee. Starbucks should not underestimate the power of this latte lobby."

Amazon receives $252 million back tax claim

It's about time all major countries suffering from tax avoidance by major international corporations followed France's lead. In all probability, Amazon will get away with a fraction of the bill, as they probably have more lawyers than the French goveernment.  But a strong message is being shouted from the rooftops.

Once again, as we have said before, why don't major countries charge a % of turnover/revenue as tax rather than as a % of profit for all companies doing more than, say, £100m pa.  If they claim they are not making a profit, then the top management should be fired by their shareholders!

From -  http://news.yahoo.com/amazon-receives-252-million-back-tax-claim-171904647--sector.html:

"Internet retailer Amazon said it had received a $252 million demand from the French tax authorities for back taxes, interest and penalties in relation to "the allocation of income between foreign jurisdictions".

The claim comes as European countries step up efforts to clamp down on U.S. companies which minimize their tax bills in the continent by channeling profits through low-tax regimes.

Amazon said it would fight the tax claim, in court if necessary, and that the demand related to the calendar years 2006 through 2010.

"We disagree with the proposed assessment and intend to vigorously contest it," the company said in its third quarter results filed last month.

An Amazon official referred to the tax demand, which had not been previously widely reported, at a UK parliamentary committee hearing.

Amazon minimizes its tax bill in France and other European countries by channeling sales through Luxembourg, which offers tax breaks to foreign companies which base themselves there.

Amazon said it received a proposed tax assessment from the tax authority in September but that it was still awaiting a final assessment.

Internet group Google is also under audit by the French tax authority regarding its structure, which channels sales through Ireland, but the company denied a newspaper report last month that it had received a back tax claim for 1 billion euros."