November 11, 2012

UK parliament seeks tax explanation from Starbucks, Amazon

UK lawmakers issued summons to the executives of several multinational retailers, including those of Starbucks and Amazon to enquire into their tax contributions vis-à-vis their billions of pounds in sales revenues.

By admin-demo

UK lawmakers issued summons to the executives of several multinational retailers, including those of Starbucks and Amazon to enquire into their tax contributions vis-à-vis their billions of pounds in sales revenues.

The Public Accounts Committee (PAC) of the UK lawmakers will now seek explanation from the executives amidst mounting efforts by UK and Germany to ensure multinationals pay a ‘fair share’ of tax.

In October 2012, it emerged that retailers such as Starbucks paid little or no tax in the UK despite a net sales of £398m.

Similarly, online retailer Amazon was reported to have avoided taxes in UK by reporting European sales through a Luxembourg-based unit.

Commenting on the developments Labour party parliamentarian and chairman of the PAC Margaret Hodge remarked that the common finds it difficult to believe that the multinationals were paying their fair share of taxes.

"It makes people incredibly angry in the current fiscal climate," added Hodge.

Starbucks and Amazon have both denied any wrong doing, and claimed that they have followed the laws as applicable.

Britain and Germany are now expected to lobby with the G20 group of nations to keep multinational companies from exploiting loopholes to avoid taxes in the countries of their operation.