United Kingdom

Starbucks, Google, and Amazon Face Investigation For 'Immoral' Tax Evasion in the UK

A public accounts select committee of the UK parliament, made up of a group of senior members of Parliament, is set to vigorously question the tax practices of Google, Amazon, and Starbucks next Monday.

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A public accounts select committee of the UK parliament, made up of a group of senior members of Parliament, is set to vigorously question the tax practices of Google, Amazon, and Starbucks next Monday. 

The companies are in hot water over decisions to base their European businesses outside the UK in order to take advantage of lower tax base rates and avoid paying full UK corporation taxes. They will have to explain and defend their European structures, particularly decisions to register base offices in countries such as Ireland and Luxembourg and their use of "transfer pricing"—where they charge their own subsidiary companies for services.

The corporations have been charged with diverting hundreds of millions of pounds to what The Guardian describes as "secretive tax havens" through manipulative accounting practices. Margaret Hodge, the committee chair, has taken each company to account, calling Google's operating location choice of Ireland "immoral" and labeling Amazon "deliberately evasive" in displaying "outrageous" ignorance after it failed to say how much of its profit is generated in Britain.

In the past three years Starbucks has paid no corporation tax in the UK. Amazon has paid £1.8m, despite bringing a total revenue of £200m in the UK in 2011. Starbucks global chief financial officer Troy Alstead insists the company remains "an extremely high tax payer globally" but, as UK profits have been far from substantial, claims, "respectfully, I can assure you there is no tax avoidance here." Similarly, Matt Brittin, the head of Google's northern European operation, defends the company's practices. "Like any company you play by the rules [and] manage costs efficiently to offer fair value to share holders."

Hodge has been unimpressed with the companies' responses. "Most of these companies proclaim a strong corporate responsibility ethos, yet the most basic responsibility they have is to pay their fair share into the common purse," she argued, according to Raw Story. "The fact that they create jobs is an absurd argument. We have to ensure that where companies are making money in the UK, they pay their fair share, and there is a duty on HMRC to do all it can to ensure those rules are strictly and fairly adhered to."

Google's Brittin told the committee that "we comply with the law in the U.K." and "it would be very hard for us to pay more tax here based on the way we are required to structure by the system." ABC News reports that Hodge responded by saying that the committee was "not accusing you of being illegal, we are accusing you of being immoral."

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  1. This is an unfurling of naked totalitarian fervor. Fuck these regulators and taxmen all the way to Satan’s asshole.

  2. “They will have to explain and defend their European structures, particularly decisions to register base offices in countries such as Ireland and Luxembourg…”

    Explanation:
    Your taxes are too damn high.

  3. Bring me Google and Amazon. Alive if possible, dead just as good.

  4. Tax evasion is 100% legal — there is absolutely *nothing* that is illegal about tax evasion, not a thing.

    This is at best ignorant rabble-rousing nonsense — and at worst, a facist inquisition of corporations that are 100% in their rights to evade whatever taxes they can.

    1. Hence the stress on “immoral“. With no implication whatsoever that they believe the immoral ought to be illegal.

      1. Of course, Hodge is a proponent of homeopathy. So if you refuse to turn over your hard-earned cash to the Queen, and somebody is denied their sham folk treatment as a result, their blood is on YOUR hands.

        Fortunately that blood will be diluted to 400X so it’s really just water.

        1. I’m sorry to say that the fuckers running the spam filter think my link to xkcd’s take on homeopathy is spam.

          1. What… you mean this one?

      2. To make it illegal, they would have to define it and write it down. If they just call it immoral, they don’t have to say what the companies are actually doing wrong (except not paying their ‘fair share’) and they can change positions as often as they want.

        1. Funny thing is, tax evasion is a reality precisely *because* of how complex the law is. Flat tax, no (or very few) exceptions, and the opportunities for domestic tax evasion diminish. Make that flat tax reasonable and combine it with regulatory overhaul, and you’ve just about eliminated tax evasion at the international level.

          1. But that would be reasonable and not nearly as punitive, which as we all know is one of the primary uses of the tax code.

            1. It’s all about the feelings dude. Reason is for unfeeling assholes, emotions are where it’s at.

              1. I thought Beck was where it’s at.

                1. No no no, Sam Cooke, that’s where it’s at.

              2. That’s why we’re here, right?

          2. TIT, you just hate the accountants

            1. I have a CPA.

              And yeah, I *loathe* accountants.

              1. I loathe me too

          3. Taxing income, and particularly the income of multinational corporations, is inherently complicated. I’m sure the code could be simplified, but there are always going to be opportunities for tax arbitrage based on differing rules in different countries.

            1. That’s why I said that they diminish. There are a number of complexities involved with corporate taxation, and any number of them can be interpreted differently in good faith.

          4. Sadly, you are advocating that the taxman should look at tax collection as a business problem – how best to maximize revenues. For the average citizen, if you don’t like the service and pricing one business is offering you can simply go up the street to the competitors’ place of business. If you don’t like what your government is offering, there is no competitor.

            Multi-national corporations do however have that option. The UK doesnt like the fact that these corporations are taking their business elsewhere – just as Walmart doesn’t like you taking your business to Target – so they are trying to do something about it. Unfortunately, when you have a monopoly position and that monopoly includes a monopoly on the guns and badges, you don’t have to give a shit about your customer in order to get his business.

            But as an aside – has any government considered turning their operations over to Walmart? How cheap and efficient could government become?

            1. I should clarify that I say ‘sadly’ because the government is not exactly filled with people who know how to run a business. The people who know how to run businesses are busy running businesses.

              The first problem with running a business is that you have to work with what you’ve got – limited resources and unlimited competition coupled with an inexorable need to produce a successful product if you intend to stay in business. Government has none of those.

      3. Can we stop looking to England for advice on the English language now? They have apparently twisted “immoral” into meaning something entirely its opposite.

  5. yet the most basic responsibility they have is to pay their fair share into the common purse

    Oh, fer fuck’s sake.

    “Everything for the state, nothing outside the state, nothing against the state”, eh wot, you drooling fascist pinko.

    1. Part of me died when I read that part of the quote.

    2. yet the most basic responsibility they have is to pay their fair share into the common purse

      Translation: “yet the most basic responsibility they have is to voluntarily tip the thugs who are robbing them”

      It sounds even more retarded without the doublespeak.

    3. Back on this planet, their most basic responsibility is to their shareholders. Legally avoiding stratospheric taxes is part and parcel with that objective.

      1. ^^ My thoughts exactly.

  6. Per Wikipedia: “Stemcor, Hodge’s family company, was founded by her father Hans Oppenheimer more than 60 years ago. Analysis of Stemcor’s latest accounts show that the business paid tax of just ?163,000 on revenues of more than ?2.1bn in 2011.”

    I guess we can file this one under “it’s immoral when someone else does it.”

    1. Brilliant. I’m sure the Guardian was all over that.

      1. The guardians article page has Google ads for income tax specialists. Awesome.

    2. Oooh, burn!

    3. from the Wikipedia source – article =

      “”Mrs Hodge said unlike other companies under the spotlight, Stemcor did not try to shield profits or “hide information” and that was the difference between Stemcor and Starbucks.
      However, when pressed about the details of why so little tax was paid by Stemcor despite the billions of pounds it makes, Ms Hodge said that she had not done “enough detailed work” and did not have the information.””

      Seems legit.??

      Only a politician can maintain such an absurd level of hypocrisy while simultaneously being sanctimonious and self-righteous. Or put another way = no one but politicians perpetually treat everyone as though they are complete fucking idiots.

  7. What the fuck is ‘immoral’ about keeping what you earn through free and open trade? It’s not enough that millions of Britons get quality coffee, quality online shopping, and a quality search engine?

    1. When the State is a religion, tax evasion is immoral.

    2. I don’t know if I can account the entirety of the stupidity, but I imagine some of it stems for the braindead notion that the Starbucks, Google, and Amazon made their money at the expense of their customers.

      1. As such, the government will tax a portion of the profits with the promise that the citizens will get their money back…As soon as the government decides how much it gets to keep for itself.

  8. Why do I believe that that fence bordering Mexico will one day be completed … to keep people in.

  9. “The most basic responsibility they have is to pay their fair share into the common purse.”

    Look at that f’d up attitude! Where have I heard that kind of thing before?

    That’s right! This is one of the reasons our revolutionary ancestors decided they’d rather die on a battlefield than be subjected to British taxation.

    1. I’ll never forget the time Walter Williams was talking with a British MP. The MP said, “So, you Yanks rebelled because there was taxation without representation,” to which Williams replied, “That’s right.”

      The comeback: “So what do you think of taxation with representation?”

      1. Who represents me?

        1. The guy/gal that you picked…along with a few hundred thousand of your closest neighbors.

          1. Not for city taxes here in Ohio… you need to pay taxes in both the city you live and the one you work in. I’m only allowed to vote for representation in the city I live in.

      2. Well, in this case Google and Starbucks represented their view of the tax system in the UK by… choosing not to base their susidiary there.

        Just as US companies choose to up and split if they become overly taxed. Of course, then these countries are accused of being ‘unpatriotic’ and ‘immoral’ as well.

        Eventually, these governments try to get around this freedom by claiming global jurisdiction over your firm in violation of every other nation’s right to determine their own tax regime. Essentially saying, “We own you whether you like it or not, wherever you go”…. and there the freedom ends, and you’re back to King George sucking away American’s money in order to pay for the neverending war with France et al.

  10. The corporations have been charged with diverting hundreds of millions of pounds to what The Guardian describes as “secretive tax havens” through manipulative accounting practices. Margaret Hodge, the committee chair, has taken each company to account, calling Google’s operating location choice of Ireland “immoral” and labeling Amazon “deliberately evasive” in displaying “outrageous” ignorance after it failed to say how much of its profit is generated in Britain.

    My understanding of the English language seems to be rapidly deteriorating. If everybody knows where the companies are based, these may be “tax havens” but how the fuck are they “secretive”?

    I wonder how the Irish feel about being told by some limey that having Google based in their country is “immoral”.

    1. I wonder how the Irish feel about being told by some limey that having Google based in their country is “immoral”.

      I imagine they feel grateful that they get to rob Google, albeit at a lesser rate, and use the money to buy votes, instead of those British bastards.

  11. “Most of these companies proclaim a strong corporate responsibility ethos, yet the most basic responsibility they have is to pay their fair share into the common purse,” she argued, according to Raw Story. “The fact that they create jobs is an absurd argument. We have to ensure that where companies are making money in the UK, they pay their fair share, and there is a duty on HMRC to do all it can to ensure those rules are strictly and fairly adhered to.”

    GARRRRR HULK SMASH

  12. ABC News reports that Hodge responded by saying that the committee was “not accusing you of being illegal, we are accusing you of being immoral.”

    And there it is. They’re not even pretending anymore.

    1. How many times do I have to scoff at the idea of rule of law?

      1. How does once per piece of legislation/regulation sound?

        1. It’s a deal. Does that make me a scofflaw? I certainly hope so.

            1. I thought the idea was to do a reboot of Firefly using the cast of The Vampire Diaries. Wasn’t that the idea?

              1. That seems like a terrible thing to do to Firefly.

                1. I didn’t say it was a good idea.

              2. The cast of the kids in the hall would be better.

                1. “You want me to give you a quarter so you can masturbate in front of my son your bunk?”

  13. More proof that Guy Fawkes had the right idea.

    1. Yup, restoring a Catholic monarch to the throne would’ve solved everything!

      1. Hey, the tithe was a mere 10%. I’d take that deal in a heartbeat.

  14. OT: http://blog.al.com/breaking/20…..er_default

    An Auburn University computer science PhD candidate is paying for his tuition using online-shopping rebates.

    1. He must be fucking shitty if his advisor’s not paying his tuition and a stipend.

  15. Her Imperial Majesty will not be denied her purse!

    After all, she has to pay for her granddaughter-in-law to show that hairy snatch to Will, sometimes Harry, and the millions of readers of those European tabloids.

    SEND HER VICTORIOUS
    HAPPY AND GLORIOUS
    LONG TO REIGN OVER US
    GOD SAVE THE QUEEEEEEEEEEEN!

  16. They are heroes in my book.

    1. They would especially be heroic if Google and Amazon started blocking all IP’s originating in Britain and Starbucks ahut down all of their British stores. IOW, if they told HRM to kindly fuck off, then they would trully be heroes.

      1. Google goes Galt.

      2. Loki| 11.13.12 @ 6:41PM |#
        “They would especially be heroic if Google and Amazon started blocking all IP’s originating in Britain and Starbucks ahut down all of their British stores. IOW, if they told HRM to kindly fuck off, then they would trully be heroes.”

        You bet! And Google folded when the Chi Coms said ‘you can’t show that site’.
        So I’m not holding my breath.

  17. We have to ensure that where companies are making money in the UK,

    they are punished appropriately.

  18. I wonder how the Irish feel about being told by some limey that having Google based in their country is “immoral”.

    Smugly self-satified, I hope.

    1. They probably think of potatoes and smile.

      1. Then they want to fight about it.

        1. You skipped the drinking.

          1. implied as it is continuous.

  19. http://www.telegraph.co.uk/fin…..broad.html

    Britain’s been scaring away their best and brighest for years with their punitive taxes.

  20. I don’t say evasion. I say avoision. Or sabataage.

    1. I am not an alcoholic…I am an alcoholist!

      1. I’m a drunk. Checkmate!

        1. I’m a dipsomaniac, and I’m proud of it!

  21. “How much money did you make last year?

    “Send it in.”

  22. “Pay their fair share”

    Hmmmm, where have I heard that phrase before?

  23. And meanwhile, in the ‘oneupsmanship’ aisle; France smells blood in the water as well

    1. ?160M?

      How long will keep their government functioning?

      15 minutes, perhaps?

      1. “How long will keep their government functioning?”

        That money will never see the treasury, it’s to tip the bell hop and bartender at the next climate junket..er..confrence.

  24. lol, like any of those companies care about some kangaroo UK court lol

    http://www.Anon-Webz.tk

  25. Those of you who aren’t anarchists and don’t expect 0% tax rates should recognize that this is a problem.

    Somebody is going to get taxed. Transnational corporations play shell games with their money to avoid taxation. The tax burden they avoid falls on those companies and people without the resources to play those games.

    Note that corporations are creatures of government, granted license to exist and their special powers to avoid taxation by government. That government has so privileged certain organizations should not be something to cheer about.

    1. “Note that corporations are creatures of government, granted license to exist”

      What?!?!

      1. Pretty sure our newest statist presumes rights to be ‘granted’ by a government.

        1. Naturally,..how else would they get them?…GOD?…LOL

    2. Well, yes, it is a problem when governments establish systems that encourage tax evasion, and then berate those who partake in it for being immoral.

    3. buybuydandavis| 11.13.12 @ 8:12PM |#
      “Those of you who aren’t anarchists and don’t expect 0% tax rates should recognize that this is a problem.”

      Only those of you who are ignoramuses would recognize this as a ‘problem’.

    4. Thus spoke someone who has never heard of tax incidence.

  26. The fact that they create jobs is an absurd argument.

    Yeah, fuck jobs. The government will take care of everybody with its magical tax money.

  27. Transnational corporations play shell games with their money to avoid taxation.

    Oh, the horror.

    1. I know, I got the vapors just reading that. What could possibly be more moral than sending the fruit of one’s labors in to be pissed away on bottomless welfare schemes and endless wars?

      1. Pssst…socialism is the ‘new’ patriotism..Pass it on.

  28. Who’s picture is on the currency?
    render unto caesar, bitches.

  29. So, I have a question:
    If you are on trial in the OK on some criminal offense, do you have to be found “innocent” before you’re let go?

  30. If there’s anything that will get my Irish up, its having some fatuous twat who bleeds their country to death via fiscal insolvency accuse me or any organization of, “Immorality” as though I belonged to their goddamn church and they were some high priest whose judgements were not subject to any rational scrutiny but rather to be accepted as truth by virtue of their position.

    And, in typical Irish fashion, my response would not be to issue some technically-correct PR statement attempting to redirect the conversation to some more even-handed territory, but rather go directly at the speaker and shove their self-righteous bullshit right down their throat in front of everyone, to the point where the rest of the world get the message clearly: You cannot get away with impugning my character or moral standing without suffering an overwhelmingly, disproportionately violent response which will destroy them utterly, and put the fear of God in any future, like-minded petite-Mussolini. Tell it to the judge you incompetent partisan failed-lawyer hack.

  31. Would Google grow a pair and start shutting off service to these nations until they hold recall elections to pull these idiots out of office? It’s not like they’re making money there anyway.

    Pull the plug and watch the pitchforks come out. Who do you think the British people would rather do without, Ms. Hodge?

    1. Messrs. Page and Brin have made side careers of sucking up to various governments; notably Obama.
      They are also at a point in the company’s development where they are still able to charge near monopoly rates. Further, the stock is split into different ‘qualities’, such that most stockholders have little say in the operation.
      So my guess is that “pair” will stay undeveloped until they are subject to some real competition, at which time the stockholders will say: ‘You gave away *WHAT* to the stinking UK?’

  32. Whoa!
    In the upper right, I’m getting a pitch from UofC (that’d be Cincinnati) for a Masters of Science in Taxation degree.
    There’s a signal there regarding how taxes affect us all, and I’m not happy to read it.

    1. I get an ad for handguns and self defense schooling + southeast seeing eye dogs, and low cost health insurance, go figure…hmmm.

  33. In Italy several weeks back, we got the Euro version of CNN on the tube in the hotel.
    Some ditzy blonde interviewed the Minister of Dough (or somesuch) of Monaco, asking him to respond to charges of being a ‘tax haven’.
    I couldn’t believe it! The guy tried to claim it wasn’t!
    Hell, he should have said: You BET! You got money? You make money? You come here and we’ll let you keep more of it than anywhere else you can find!
    And added a money-back guarantee.

    1. I thought Europe had some sort of list to keep anti-government whackjobs like yourself off the continent. If not they should, you’re polluting the new consciousness.

      1. Snuck in; anyone who elects to drive in Italy is presumed to be brain-dead.

  34. I have a solution.

    amazon84lkk98.onion

    starbucks98jpz9.onion

    google976ldjd87wkjg.onion

    Tor, bitchez.

    Although, I think Starbucks on a Tor Hidden Service wouldn’t be very practical for their business model.

  35. Western Civilization is becoming a tyranny of petty tax collectors and revenue seekers. The public sector’s massive pensions and feeding trough has become threatened by a global economic downturn, and their answer to simply pluck the goose with more vigor.

    It’s time for a massive private sector revolution. We need to collectively sit down and produce nothing more for these leeches. Let them know who the real masters in this relationship are.

    1. Paul.| 11.13.12 @ 10:57PM |#
      “Western Civilization is becoming a tyranny of petty tax collectors…”

      I’m gonna disagree with the term “petty”, and as an example, you can check out the discussion between Schermer and D’souza:
      (sorry, you’ll have to look it up yourself: “No ObamaCare – YouTube; Reason squirrels don’t like the link, and coding is no my yob)
      A woman makes a statement that Obama used a “metaphorical” gun to collect the sandwich. “Metaphors” are for those who think it’s fun and games; the IRS doesn’t do fun and games. Shermer shoulda busted her on it.

    2. I’ve thought of this as well. A strike in the Galt fashion. If I were in that tax range, I would say “I ‘ll live off of less because I don’t want to work for the state”

  36. Irony. These companies are chock full of progressives. Time for the metal to meet the road.

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