The “Google Tax” is Created for the Digital Market. What is it?

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The United Kingdom is kicking off the crackdown on multinationals with its “ Google tax ” (as it is popularly known), a tax that taxes 25% of the profits obtained in that country as a result of the economic activities of these companies. What is the aim of this? To prevent large multinational companies from taking advantage of their complex financial structures to liquidate their profits in other countries where the tax burden is lower, and thus pay less tax.

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Why “Google tax”?
Google is the most famous company to have made this move to avoid paying taxes on all of netherlands phone number example its profits obtained in the United Kingdom . For example, in 2013 Google had revenues of £3.4 billion but, thanks to artificial diversions to countries such as Ireland, it only paid taxes worth £20.4 million. The country par excellence for these maneuvers is Southern Ireland, which has a corporate tax rate of 12.5%. If we compare this with Northern Ireland (21%), we can understand why many British, Spanish and American companies set up headquarters in Southern Ireland.

While we have mentioned the Internet giant, Google, Starbucks, Facebook, Amazon and Apple (among other companies) are also in the sights of the English Secretary of the Treasury , George Osborne.

Osborne has been clear in his autumn press conference: “ We offer one of the lowest tax rates in the world to attract businesses, but we expect those taxes to be paid .” In other words: the conditions will remain in place for England to remain attractive to the world’s companies, but they will be heavily supervised to prevent them from evading taxes.

It is worth remembering that this announced Google tax would come into effect in the first quarter of 2015. It is suspected that it will be before the elections in May if it goes beyond the first quarter. Being an election year, the aim is to have an impact on the citizens and there is nothing better than a tax that takes from “the rich” to give to the “poor”.