The UK wants to tax the money tech giants shift to tax havens

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Pile of British pound coins

The UK’s move to start taxing digital companies that shift earnings to tax havens will generate an average of £200 million ($266 million) in revenue for the government every year.

Published 1 hour ago  |  Photo by Reuters/Toby Melville
Pile of British pound coins

£200 million

The new tax, announced this week by chancellor Philip Hammond, targets one popular technique that companies use to minimize their tax bills.

Pile of British pound coins

£200 million

Firms base their intellectual property in subsidiaries located in low-tax jurisdictions, then pay royalties to that subsidiary, effectively shifting earnings offshore.

Pile of British pound coins

£200 million

Google paid only £36.4 million in UK corporate taxes in 2016. Apple paid only £12.9 million a year earlier. Both take in annual revenue of around £1 billion in Britain.

Pile of British pound coins

£200 million

The added tax revenue that the government expects from the new tax—£800 million by 2023—is small compared with the £11 billion that the UK is estimated to lose every year because of corporate tax avoidance.

Published 1 hour ago

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