Google, Apple, Amazon, Starbucks, Vodafone and Tax

The Telegraph has the usual rant article about multi-nationals and the amont of tax they don't pay. This time, Googles Eric Schmidt is putting his foot in his mouth:

"It's called capitalism," he said. "We are proudly capitalistic. I'm not confused about this."

There was a lot of noise generated when Google, Amazon and Starbucks went in-front of a government committee and were quizzed about the amount they pay in the UK.

Companies have long had complicated tax structures, but a recent spate of stories has highlighted a number of tax-avoiding firms that are not seen to be playing their part.

Starbucks even offered, out of the good of it's heart (**BS**) to pay £20m over the next 2 years in extra tax.

Personally, I find this laughable.

I like having public services (schools etc) which need tax to operate, to the point where I've repeatedly voted against my own interests for parties which promote these things (Labour in New Zealand for example). So I have no objection to paying the required tax - but not any more than that.

The blame for this lies firmly with the politicians who were trying to grill Starbucks et al in the committee: They are the ones setting the rules. The multi-nationals are exploiting the rules while staying within them, and if the politicians want change, they need to make changes to the law. Either that, or shut the hell up about it.

This will, of course, never happen. "Fixing" Amazon (and Apple) would require a change to EU law. "Fixing" the other 2 would require a change in international law, which isn't even law at all. It's a lot easier to give an outraged 30 second soundbite.

Vodafone is different situation. They have been in the press recently for the same things as Amazon et al, but previously, in 2010:

Vodafone was accused of owing £6bn in tax, and the company had reserved £2.2bn to meet it's UK tax obligations, but George Osborne struck a deal to accept £1.25bn

To me, this is the "crime". A large multi-national saying "nah, we don't want to pay you £6b. How about £1.25b?". The other one is just proper, and importantly legal, tax management.

Looks like the New Zealand press and politicians tried to shame Facebook and Google on the same thing, but it didn't stick quite as well. Easier to ignore a very small market, I suspect.

Nic Wise

Nic Wise

Auckland, NZ