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New tax avoidance rules unlikely to stop multinationals

While the new General Anti-Abuse Rule might end up snarling many small businesses or contractors in red tape, it’s unlikely that large multinationals will be.

I don’t like the idea that these massive companies like Amazon, Starbucks, or Google more or less get away with murder when it comes to paying their fair share of taxes in the UK. The Government doesn’t either, of course, and that’s the reasoning behind the new GAAR rules that will be going into effect; the rules are designed to cut back on tax avoidance, but quite a few people think that the only businesses that are going to be affected by GAAR are likely to be smaller firms and contractors, not the large multinationals that need to be targeted by anti-tax avoidance legislation.

Corporate tax avoidance is a ridiculous problem here, what with reports emerging recently that Starbucks has paid only a pittance of the tax it owes HM Revenue & Customs over the past fourteen years. Amazon as well has come under fire for using a business arrangement out of Luxembourg to funnel its profits through in order to avoid taxes nearly completely as well, and as far as I’m concerned it’s just bad cricket.

GAAR as it stands now, tax campaigners say, no longer has the teeth to go after the kind of aggressive tax avoidance multinationals such as Amazon and Starbucks engage in. Instead the language simply calls for the ability to regulate any tax avoidance that is ‘abusive,’ and since these multinationals comply with all the tax regulations in their countries of operation by filling out necessary paperwork, the fear is that their actions could be interpreted as not being abusive, which will let these bastards slip right though yet another loophole even as the law was inspired directly by their behaviour in the first place!

The problem is that as much as the Government wants those billions in tax revenue, it doesn’t want to drive companies away either. Alienating Amazon to move its European distribution and processing centres somewhere else in Europe could be a major blow to our still fragile economic recovery; I can understand their reticence, but at the same time I absolutely condemn the corporate practices that cheat the taxman out of such massive sums of cash in order to simply turn a higher margin of profit.

For shame, Amazon! Don’t you make enough money as it is from your overpriced goods and services? And don’t get me started on the ridiculously overpriced coffee products at Starbucks – though I’m sure that if that particular multinational started charging more reasonable prices on their coffee and paid their taxes that they owe, they’d probably end up in administration.

Would a world without Starbucks truly be so terrible?

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