By Jonathan Davies
The Confederation of British Industry (CBI) has warned the Chancellor George Osborne over his so-called 'Google tax', announced in the Autumn Statement yesterday (Thursday).
The Organisation for Economic Cooperation and Development (OECD) is already putting together plans to crackdown on tax avoidance by big, multinational companies. And the CBI Director General John Cridland warned that it could "be a concern for global businesses" if the UK did anything separate from the OECD's plans.
In the Autumn Statement, George Osborne announced plans impose a 25% tax on profits for multinational businesses, like Google, Apple, Amazon, Starbucks and many more, which divert their profits elsewhere. He said it will raise £1bn in taxes.
John Cridland, CBI Director-General, said: "International tax rules are in urgent need of updating, but the decision for the UK to go it alone, outside the OECD process, will be a concern for global businesses, and moving the goalposts on offsetting losses risks creating a worrying precedent."
Announcing the plans, Mr Osborne said: "Today I am introducing a 25% tax on profits generated by multinationals from economic activity here in the UK which they then artificially shift out of the country."
"This new Diverted Profits Tax will raise over £1bn over the next five years."
The Chancellor has always voiced his support for the OECD's planned action, but the Action Plan on Base Erosion and Profit Shifting (BEPS...or 'tax avoidance') won't be ready for at least another year. And it appears Mr Osborne doesn't want to wait.
Join us on