UK To Introduce so called "Google Tax" Over Diverted Profits

[engine]

Well, it's almost there now. The plan is to launch the so called "Google Tax" to recover diverted profits. This affects way more businesses than just Google, and only names Google as a description. Any business that diverts its UK profits is likely to be subject to this new "diverted profits tax."

Companies that move their profits overseas to avoid tax will be subject to a "diverted profits tax" from April, the chancellor has said.

In his final Budget before the election, George Osborne said firms that aid tax evasion will also face new penalties and criminal prosecutions.

The so-called "Google Tax" is designed to discourage large companies diverting profits out of the the UK to avoid tax. UK To Introduce so called "Google Tax" Over Diverted Profits [bbc.co.uk]

"Let the message go out: this country's tolerance for those who will not pay their fair share of taxes has come to an end," Mr Osborne said.

[graeme_p]

I do not know whether this will be allowed to apply to profits diverted to other EU countries by EU law. If it does not it is a symbolic gesture because diversion is prevented by existing legisation - that is precisely why Amazon use Luxembourg and Google and MS use Ireland.

What Amazon does is pretty stunning - you can buy something from Amazon UK, have it shipped to you in the UK, coming from a warehouse in the UK, and Amazon will pay tax on the profit in Luxemburg.

[engine]

Precisely, graeme_p, and that's why this move announced in today's budget speech. They are moving swiftly on it, but I agree, the process may be stifled by legislative quicksand. Although, I heard, some time back, that Germany was looking at solutions, too. It may require multilateral action, as a unilateral approach may simply become bogged in the quicksand swamp.