UK lawmakers want tax crackdown on multinationals

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Companies that sell in Britain should pay tax in Britain. That was the message on Monday to multinational firms from UK lawmakers.

Public anger over companies like Starbucks, Amazon and Google paying little or no corporation tax in the UK has prompted the parliamentary Public Accounts Committee (PAC) to demand changes in the law.

The MPs called it “outrageous and an insult to British businesses and individuals who do pay their fair share”. They also criticised the UK tax authorities for being “too passive”.

They want changes in the rules and better cooperation with other countries to limit profit-shifting across borders.

That echoes demands from European leaders for a crackdown on corporate tax avoidance.

At the same time it was announced by Britain’s finance ministry that it aims to raise more than two billion pounds a year (2.46 billion euros) over the next two years by tackling tax avoidance by multinational companies and rich individuals with offshore accounts.

Last month the PAC grilled executives from Starbucks, Google and Amazon over why they paid little tax in the UK while taking in billions of pounds in revenues.

The committee said it found the evidence it received was “unconvincing, and in some cases evasive”.

Starbucks said it had always complied with UK tax law but revealed on Sunday that, in response to the public outcry around its tax arrangements, it was looking at changing these.

Amazon said it complied with the tax rules, but declined to comment on the committee’s findings. Google declined to comment.

A recent investigation by Reuters found Starbucks paid no UK corporation tax in the past three years and had told investors it was profitable while reporting big losses to the UK tax service.

Amazon pays little income tax in the UK because it channels UK sales through Luxembourg, which offers some of the lowest effective tax rates in Europe.

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