UK: ‘Google tax’ proposed to hike rates for foreign firms

As the European Commission investigates claims of anticompetitive effects of tax breaks offered to international companies, a UK official has proposed new tax rules that would aim to level the playing field between international firms and domestic competition.

UK Chancellor of the Exchequer George Osborne has proposed a 25 percent tax on local profits of foreign companies. The proposal would curb companies’ practice of using tax structures in Ireland, Luxembourg and other EU member states that allow companies to pay less than domestic rivals.

”That’s not fair to other British firms,” Osborne said. “It’s not fair to the British people, either. Today we’re putting a stop to it.”

The proposal, revealed Wednesday, would raise about $1.6 billion over the next five years in extra UK tax revenue, the policymaker said. Experts are calling the plan the Google Tax as other member states including France and Germany have proposed similar tax rules aimed at curbing Google’s tax breaks, enjoyed by the company despite large operations in those nations.

Google declined to comment on Wednesday’s announcement, but Executive Chairman Eric Schmidt had previously commented on similar proposals, decrying the plan as one that would lead to “less innovation, less growth and less job creation.”

Full content: Gadgets.NDTV

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