'Google tax' is a popular term used to refer to anti-avoidance provisions that have been passed in several jurisdictions dealing with profits or royalties that have been diverted to other jurisdictions with lower or nil rates.
Effective for accounting periods beginning on or after 1 April 2015, the Finance Act 2015[1] imposes a levy on company profits—excluding those of small and medium-sized enterprises—that are routed via "contrived arrangements" to tax havens.[2][3] The arrangements can concern either those that involve entities or transactions lacking economic substance,[4] or efforts by a non-UK company to avoid a UK taxable presence.[5] Companies that determine that they are subject to the tax have a statutory duty to notify Her Majesty's Revenue and Customs of that fact within three months after the end of the accounting period in question.[6]
The UK tax is set at 25% of taxable diverted profits (or 55% with respect to ring fence profits), and will raise about £350m annually by 2017–18, according to UK Treasury estimates.[2]
The Confederation of British Industry (CBI) described the effort to impose taxation on diverted profits as "a real concern for global business".[7] Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants (ACCA), said, "It's a bit like reporting yourself to the police and then having to defend yourself."[8]
Amazon announced in May 2015 that it will start paying tax in the UK on British retail sales rather than booking sales through Luxembourg, this will mean the group will not have to pay the diverted profit tax.[9]
Australiaedit
The term has similarly been applied to the Tax Laws Amendment (Combating Multinational Tax Avoidance) Act 2015[10] introduced in the May 2015 budget, which received Royal assent in December 2015.[11] The provisions came into effect on 1 January 2016 "in connection with a scheme, whether or not the scheme was entered into, or was commenced to be carried out, before that day. "[12]
The Australian measures focus on arrangements that attempt to avoid establishing a permanent establishment presence in Australia. While they were originally intended to target a group of thirty large multinational corporations, other taxpayers will still need to document whether they would be subject to the provisions, as the Australian Taxation Office would have the power to assess an administrative penalty of 100% of any calculated shortfall of tax owed, together with base tax and interest.[13]
In the 2016 Australian federal budget, the government announced the introduction of a diverted profits tax (DPT) from 1 July 2017. The Diverted Profits Tax Act 2017 imposes a 40 percent tax on avoidance schemes entered into by significant global entities (SGEs), which are defined as global parent entities with an annual global income of A$1 billion or more.[14]
The term has also been used to refer to a tax in Spain, introduced in 2014, that imposes a royalty charge on Google when its news site, Google News, uses material belonging to a Spanish publisher.[15] Google's response was to cease collating such articles on Google News.[16]
^"Australia introduces multinational anti-avoidance legislation into parliament" (PDF). Pricewaterhouse Coopers. September 21, 2015.
^"Diverted profits tax". Australian Taxation Office. Retrieved 27 August 2018.
^Bershidsky, Leonid (11 December 2014). "Why 'Google Tax' Became a Catchphrase". bloomberg.com. Retrieved 11 December 2014.
^Rushe, Dominic (11 December 2014). "Google News Spain to close in response to story links 'tax'". The Guardian. Retrieved 11 December 2014.
External linksedit
Draft Clauses & Explanatory Notes for Finance Bill 2015
January 01, 1970
google, confused, with, criticism, google, neutrality, this, article, disputed, relevant, discussion, found, talk, page, please, remove, this, message, until, conditions, december, 2022, learn, when, remove, this, message, popular, term, used, refer, anti, avo. Not to be confused with Criticism of Google The neutrality of this article is disputed Relevant discussion may be found on the talk page Please do not remove this message until conditions to do so are met December 2022 Learn how and when to remove this message Google tax is a popular term used to refer to anti avoidance provisions that have been passed in several jurisdictions dealing with profits or royalties that have been diverted to other jurisdictions with lower or nil rates Contents 1 Diverted profits tax 1 1 United Kingdom 1 2 Australia 2 Royalty charges 3 References 4 External linksDiverted profits tax editThe UK and Australia measures took effect in advance of the Base erosion and profit shifting measures being considered at recent G20 summits United Kingdom edit Effective for accounting periods beginning on or after 1 April 2015 the Finance Act 2015 1 imposes a levy on company profits excluding those of small and medium sized enterprises that are routed via contrived arrangements to tax havens 2 3 The arrangements can concern either those that involve entities or transactions lacking economic substance 4 or efforts by a non UK company to avoid a UK taxable presence 5 Companies that determine that they are subject to the tax have a statutory duty to notify Her Majesty s Revenue and Customs of that fact within three months after the end of the accounting period in question 6 The UK tax is set at 25 of taxable diverted profits or 55 with respect to ring fence profits and will raise about 350m annually by 2017 18 according to UK Treasury estimates 2 The Confederation of British Industry CBI described the effort to impose taxation on diverted profits as a real concern for global business 7 Chas Roy Chowdhury head of taxation at the Association of Chartered Certified Accountants ACCA said It s a bit like reporting yourself to the police and then having to defend yourself 8 Amazon announced in May 2015 that it will start paying tax in the UK on British retail sales rather than booking sales through Luxembourg this will mean the group will not have to pay the diverted profit tax 9 Australia edit The term has similarly been applied to the Tax Laws Amendment Combating Multinational Tax Avoidance Act 2015 10 introduced in the May 2015 budget which received Royal assent in December 2015 11 The provisions came into effect on 1 January 2016 in connection with a scheme whether or not the scheme was entered into or was commenced to be carried out before that day 12 The Australian measures focus on arrangements that attempt to avoid establishing a permanent establishment presence in Australia While they were originally intended to target a group of thirty large multinational corporations other taxpayers will still need to document whether they would be subject to the provisions as the Australian Taxation Office would have the power to assess an administrative penalty of 100 of any calculated shortfall of tax owed together with base tax and interest 13 In the 2016 Australian federal budget the government announced the introduction of a diverted profits tax DPT from 1 July 2017 The Diverted Profits Tax Act 2017 imposes a 40 percent tax on avoidance schemes entered into by significant global entities SGEs which are defined as global parent entities with an annual global income of A 1 billion or more 14 Royalty charges editSee also Ancillary copyright for press publishers The term has also been used to refer to a tax in Spain introduced in 2014 that imposes a royalty charge on Google when its news site Google News uses material belonging to a Spanish publisher 15 Google s response was to cease collating such articles on Google News 16 References edit Finance Act 2015 legislation gov uk The National Archives 2015 c 11 a b Peston Robert 10 December 2014 Who wins from Google tax BBC News Retrieved 11 December 2014 Williams Christopher 10 December 2014 Google Tax targets double Irish tax avoidance The Daily Telegraph Retrieved 11 December 2014 FA2015 ss 80 81 FA2015 ss 86 87 FA2015 s 92 Houlder Vanessa 10 December 2014 Business leaders attack UK Google tax The Financial Times Retrieved 11 December 2014 Hall Kat 10 December 2014 Firms will have to report OWN diverted profits under Google Tax law The Register Retrieved 11 December 2014 Bowers Simon 23 May 2015 Amazon to begin paying corporation tax on UK retail sales The Guardian Retrieved 23 May 2015 Tax Laws Amendment Combating Multinational Tax Avoidance Act 2015 Act No 170 of 2015 Cth Crabb Annabel 12 May 2015 Budget 2015 Hockey gets a visit from the Fairness Fairy ABC News TLA CMTA A2015 Schedule 2 Item 7 Australia introduces multinational anti avoidance legislation into parliament PDF Pricewaterhouse Coopers September 21 2015 Diverted profits tax Australian Taxation Office Retrieved 27 August 2018 Bershidsky Leonid 11 December 2014 Why Google Tax Became a Catchphrase bloomberg com Retrieved 11 December 2014 Rushe Dominic 11 December 2014 Google News Spain to close in response to story links tax The Guardian Retrieved 11 December 2014 External links editDraft Clauses amp Explanatory Notes for Finance Bill 2015 Retrieved from https en wikipedia org w index php title Google tax amp oldid 1171795864, wikipedia, wiki, book, books, library,
