Western governments look to close tax loopholes used by tech companies


According to European reporters from Reuters that have seen a recent a draft of an action plan compiled by Western governments, a number of countries are setting their collective sights on massive technology companies, including Apple, Google and Amazon, to do away with various loopholes that these enterprises use to avoid paying taxes.

Over the last year, it has been brought to light that major tech companies have been taking advantage of structures in tax systems that allow them to reduce the amount of money they pay to government organizations, rather dramatically in some cases.

For example, in May, a U.S. Senate committee called out Apple for being registered in Ireland but “managed” (i.e. actually run in) the United States, meaning they weren’t qualified as a tax resident in either country. Meanwhile, Amazon has been using “specific activity exemptions” to run its retail business in European countries like Britain or Germany without having to pay taxes in either of them.

The Organization for Economic Co-Operation and Development (OECD) is basically an advocacy group that advises a lot of wealthy first-world Western countries, and it is also the organization that a G20 group of countries has tasked to come up with a way to stop big companies from maneuvering their profits into tax shelters. The OECD is expected to present an action plan to the G20 group later this month.

It should be noted that none of these companies are directly accused of breaking any laws, merely that they were taking advantage of tax loopholes already legally in place in all of these countries. The OECD’s job is to find ways to reduce or minimize the effects of these loopholes to ensure that each government makes the most revenue as possible.

[via Yahoo! News]

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