UK Announces Tax Reforms That Will Affect Apple, Amazon, and Other Tech Companies

The United Kingdom government is cracking down on technology companies like Apple, Google and Amazon, with the country’s Treasury department announcing upcoming changes that will tax any UK earnings, regardless if they are held offshore.

Erik Telford, president of the Franklin Center for Government & Public Integrity, wrote in an article for The Hill that the country’s antitrust agency has exhibited “alarming behaviour that threatens the viability of companies doing business in South Korea, including such major American corporations as Apple, Google, Intel, Microsoft, Oracle and Qualcomm.”
Apple prides itself as one of the biggest tax payers in the world, and justifies storing a large portion of its earnings overseas as it sells most of its products outside the U.S. Tech giants have long been alleged of avoiding taxes via loopholes or favors, as we saw in Ireland. Apple owes Ireland €13 billion in back taxes with the government now expected to take Apple to court following the delay in settling its dues. Keeping this in mind, it’s clear that the UK isn’t going to take tax issues lightly.

The Treasury source cited by Business Insider said “If you’re hosting your intellectual property in a country that doesn’t charge tax, and using that IP to make profit by interacting with UK customers, we will be taxing you at 20%.” The UK Chancellor has mentioned that the changes are coming into effect due to the dawn of the “digital age”.

“Multinational digital businesses pay billions of pounds in royalties to jurisdictions where they are not taxed,” added the chancellor. “And some of these royalties relate to UK sales.”

 


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