The U.K. government announced in Wednesday's annual budget that it plans to clamp down on tax avoidance by increasing the tax it collects from online giants such as Apple and Amazon.

In his Treasury speech to the Commons, Chancellor Philip Hammond said income tax would be charged on royalties relating to U.K. sales, even when they are paid to a low-tax jurisdiction and would not normally be taxed in the UK under current rules.

3343806  xlarge trans NvBQzQNjv4BqgsaO8O78rhmZrDxTlQBjdGtT0gK 6EfZT336f62EI5U
The new rules are due to come into effect from April next year, and estimates suggest they will raise approximately 800 million pounds ($1.07 billion) in extra tax over the next five years. However, Hammond admitted they would only go some way to balancing out the taxation treatment of digital firms, and that more would have to be done to tackle tax avoidance.

Multinational digital businesses pay billions of pounds in royalties to jurisdictions where they are not taxed and some of those relate to UK sales.

This does not solve the problem, but it does send a signal of our determination and we will continue work in the international arena to find a sustainable and fair long-term solution that properly taxes the digital businesses that operate in our cyberspace.

Apple recently came in for criticism when the so-called Paradise Papers revealed that the company sidestepped a 2013 crackdown on its controversial Irish tax structure by moving the majority of its offshore cash holdings to the small island of Jersey, a self-governed territory with loose ties to the United Kingdom.

The papers showed that Apple's two key Irish subsidiaries were managed from the Jersey offices of offshore tax law firm Appleby from 2015 until early 2016. Apple reportedly chose Jersey after exploring several potential tax havens, such as Bermuda and the Cayman Islands.

Apple apparently turned to Jersey after European officials began to crack down on the so-called "Double Irish" tax structure it had exploited. The loophole allows for multinational corporations to funnel revenue through an Irish subsidiary, which in turn sends that money to another Irish subsidiary that has residency in a tax haven. The practice has enabled Apple to save billions of dollars in taxes globally.

Apple responded to the revelations contained in the Paradise Papers by saying that it made regulators in the U.S. and Ireland, and the European Commission, aware about the reorganization of its Irish subsidiaries, and added that the changes haven't reduced its tax bill.

Last year, the European Commission ordered Ireland to collect $14.5 billion in back taxes from Apple, after it concluded that the country's tax agreements with the tech giant represented "illegal state aid". Both Apple and the Irish government are currently appealing the ruling.

Apple has repeatedly highlighted its position as the largest taxpayer in the world and reiterated the fact that it holds overseas cash because that's where the majority of its products are sold. Apple CEO Tim Cook has said that Apple is willing to repatriate some of its offshore cash holdings into the U.S., but he also recently said that tax reform is "sorely needed" first.

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Top Rated Comments

Stella Avatar
50 months ago
Well done, we have to ask outselves why it has taken so long. Apple’s behaviour is morally corrupt and CEO Cook well knows it.
[doublepost=1511439055][/doublepost]

No deal, no money.

We are enjoying every single second as the EU squirms for money for which it has no legal claim whatsoever. Apple owes Ireland €13bn and the EU is suing Ireland for non-collection. What a mess
Wasn’t a good budget outlook yesterday, was it? Growth cut amongst other bad news.

A ‘no deal’ outcome isn’t going to be good for the UK. A growing number of Tory PMs beginning to realize this.

The euro zone outpacing the UK.

The May government in constant turmoil.
Score: 16 Votes (Like | Disagree)
Jambalaya Avatar
50 months ago
Well done, we have to ask outselves why it has taken so long. Apple’s behaviour is morally corrupt and CEO Cook well knows it.
[doublepost=1511439055][/doublepost]
The hole is getting deeper.

The UK is getting what it wanted - ‘freedom’!

Hope your enjoying your kippers!
No deal, no money.

We are enjoying every single second as the EU squirms for money for which it has no legal claim whatsoever. Apple owes Ireland €13bn and the EU is suing Ireland for non-collection. What a mess
Score: 13 Votes (Like | Disagree)
Gorms Avatar
50 months ago
Well, we've got to dig ourselves out of the 600ft deep Brexit hole somehow?
Score: 9 Votes (Like | Disagree)
Stella Avatar
50 months ago
Well, we've got to dig ourselves out of the 600ft deep Brexit hole somehow?

The hole is getting deeper.

The UK is getting what it wanted - ‘freedom’!

Hope your enjoying your kippers!
Score: 8 Votes (Like | Disagree)
Porco Avatar
50 months ago
£800m over 5 years?
So £160m a year between all companies avoiding UK taxes? That's what, one or two minor ad campaign's worth each? Yeah, that'll teach 'em :rolleyes:

The latest 'fig leaf' measure to look like they're doing something while actually doing very little. They have talked about cracking down on tax avoidance for years but never seem to do anything to seriously tackle it. They said as much... "send a signal of our determination", lol, yeah, it tells us you aren't really going to anything serious at all.

It would be lovely if Apple, and all companies, chose to pay tax by the spirit of the law and not just the letter of the law, but they don't. It's up to governments to make sure the spirit of the law and the letter of the law are not so different that tax can be avoided to such a degree.
Score: 7 Votes (Like | Disagree)
jonnysods Avatar
50 months ago
What I'd rather see:

"Citizens hold politicians accountable for wasteful spending and complete lack of representation"

How about you manage the business of the country better and stop looking for new revenue as the only solution.
Score: 6 Votes (Like | Disagree)

Top Stories

m1x mac mini screen feature

High-End 'M1X' Mac Mini With New Design and Additional Ports Expected to Launch in the 'Next Several Months'

Sunday August 22, 2021 5:59 am PDT by
Apple can be expected to launch an updated high-end Mac mini with a new design and a faster "M1X" Apple silicon processor in the "next several months," Bloomberg's Mark Gurman reports. In the latest publication of his Power On newsletter, Gurman writes that a new high-end Mac mini, which has previously been reported to feature a new design with additional ports, can be expected to replace...
mac scanner permission error

Apple Says Fix Planned for 'You Do Not Have Permission to Open the Application' Error When Using a Scanner on Mac

Saturday August 14, 2021 6:15 am PDT by
In a newly published support document on its website, Apple has acknowledged an error that some users may receive when they try to use a scanner with a Mac in the Image Capture app, Preview app, or the Printers & Scanners section of System Preferences. A screenshot of the error message from the HP Support Community When attempting to use a scanner with a Mac, Apple said users might get an...
iCloud General Feature

iCloud+'s New Custom Email Domain Feature Now Available in Beta

Wednesday August 25, 2021 7:48 am PDT by
Starting with iOS 15, iPadOS 15, and macOS Monterey, users with a paid iCloud+ storage plan can personalize their iCloud email address with a custom domain name, such as johnny@appleseed.com, and the feature is now available in beta. iCloud+ subscribers interested in setting up a custom email domain can visit the beta.icloud.com website, select "Account Settings" under their name, and select ...
original iphone

Phil Schiller Says iPhone Was 'Earth-Shattering' Ten Years Ago and Remains 'Unmatched' Today

Monday January 9, 2017 7:15 am PST by
To commemorate the tenth anniversary of the iPhone, Apple marketing chief Phil Schiller sat down with tech journalist Steven Levy for a wide-ranging interview about the smartphone's past, present, and future. The report first reflects upon the iPhone's lack of support for third-party apps in its first year. The argument inside Apple was split between whether the iPhone should be a closed...
macbookpro13large

macOS Big Sur Update Bricking Some Older MacBook Pro Models

Sunday November 15, 2020 5:33 am PST by
A large number of late 2013 and mid 2014 13-inch MacBook Pro owners are reporting that the macOS Big Sur update is bricking their machines. A MacRumors forum thread contains a significant number of users reporting the issue, and similar problems are being reported across Reddit and the Apple Support Communities, suggesting the problem is widespread. Users are reporting that during the...
m1 imac orange

New iMac Tidbits: Headphone Jack on Side, Ethernet Port on Power Adapter, Spatial Audio and WiFi 6 Support, No SD Card Slot

Wednesday April 21, 2021 6:38 am PDT by
Apple yesterday announced a completely redesigned 24-inch iMac with the M1 Apple silicon chip. The new iMac, the first major redesign of the Mac desktop computer since 2012, has several changes compared to the previous generation. In the aftermath of the event, a few new features and tidbits may have slipped under the radar, so we’ve compiled this list of some of the less-talked-about...
General YouTube Feature 1

YouTube Premium and Music Surpass 50 Million Subscribers

Friday September 3, 2021 2:19 am PDT by
YouTube says it has passed 50 million subscribers for its Premium and Music subscriptions, making it the "fastest growing music subscription" service in the world, according to YouTube's global head of music, Lyor Cohen. YouTube says that it has more than 50 million paying subscribers collectively across YouTube Premium and YouTube Music. The Google-owned service says it attributes this...
Top Stories 75 Thumbnail

Top Stories: Last-Minute iPhone 13 Rumors, Apple Announces App Store Changes, and More

Saturday September 4, 2021 6:00 am PDT by
The finish line is in sight! Apple's annual iPhone event is likely just a week or so away and all eyes will be on the company as it unveils the next version of its most popular product line. With any luck, we'll also see the next-generation Apple Watch and perhaps even some new AirPods. Other news this week saw Apple making some more changes to its App Store policies in response to a...
omg lightning cable comparison

Security Researcher Develops Lightning Cable With Hidden Chip to Steal Passwords

Thursday September 2, 2021 6:59 am PDT by
A normal-looking Lightning cable that can used to steal data like passwords and send it to a hacker has been developed, Vice reports. The "OMG Cable" compared to Apple's Lightning to USB cable. The "OMG Cable" works exactly like a normal Lightning to USB cable and can log keystrokes from connected Mac keyboards, iPads, and iPhones, and then send this data to a bad actor who could be over a...
studio buds family

Beats Studio Buds Debuting Today With Active Noise Cancellation, Stemless Design, and More for $150

Monday June 14, 2021 8:00 am PDT by
We've seen a lot of teasers about the Beats Studio Buds over the past month since they first showed up in Apple's beta software updates, and today they're finally official. The Beats Studio Buds are available to order today in red, white, and black ahead of a June 24 ship date, and they're priced at $149.99. The Studio Buds are the first Beats-branded earbuds to truly compete with AirPods...