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
96 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
96 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
96 months ago
Well, we've got to dig ourselves out of the 600ft deep Brexit hole somehow?
Score: 9 Votes (Like | Disagree)
Stella Avatar
96 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
96 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
96 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)

Popular Stories

iPhone 17 Pro 34ths Perspective

iPhone 17 Pro Launching Later This Year With These 10 New Features

Sunday March 23, 2025 10:00 am PDT by
While the iPhone 17 Pro and iPhone 17 Pro Max are not expected to launch until September, there are already plenty of rumors about the devices. Below, we recap key changes rumored for the iPhone 17 Pro models as of March 2025: Aluminum frame: iPhone 17 Pro models are rumored to have an aluminum frame, whereas the iPhone 15 Pro and iPhone 16 Pro models have a titanium frame, and the iPhone ...
iOS 18

iOS 18.4 Expected Next Week - Here Are the Release Notes

Friday March 28, 2025 2:01 pm PDT by
With the second release candidate of iOS 18.4 that Apple seeded out today, the company finally provided us with release notes that give a full rundown on what to expect. There's an Apple Vision Pro app, new Apple Intelligence features for notifications and additional language support, plus an Apple News Food feature for Apple News+ subscribers, and several updates that should improve the...
Magic Mouse Green

What to Expect From the Magic Mouse 3

Saturday March 29, 2025 10:15 am PDT by
Apple is reportedly working on a new Magic Mouse. Below, we recap what to expect. The two key rumors for the Magic Mouse 3 so far include a relocated charging port, along with a more ergonomic design. It was briefly rumored that the Magic Mouse 3 would also feature voice control, but that was misinterpreted information. Relocated Charging Port While the Magic Mouse switched from...
top stories 2025 03 29

Top Stories: WWDC 2025 Announced, iPhone 17 Pro and iOS 19 Rumors, and More

Saturday March 29, 2025 6:00 am PDT by
Apple's big developer event is a little over two months away, and rumors about what we can expect to see in Apple's next major operating system updates are becoming increasingly frequent. A public release of iOS 18.4 is also imminent with a number of updates and improvements, although we won't be getting the major Apple Intelligence Siri upgrades that had reportedly been planned for this...
Foldable iPhone 2023 Feature Homescreen

Six Things to Know About Apple's Upcoming Foldable iPhone

Friday March 28, 2025 3:54 pm PDT by
We've been hearing rumors about a foldable iPhone for almost a decade now, but it looks like we might finally see the device come to fruition in 2026. We're going to be waiting many more months for the foldable iPhone, but so far we're hearing good things. Apple wants to make it creaseless. It's taken Apple multiple years to design a foldable iPhone that it's satisfied with because Apple ...
iOS 19 visionOS UI Elements

Apple Codename Provides Clue About iOS 19's Rumored New Design

Sunday March 30, 2025 6:40 am PDT by
Multiple sources have claimed that iOS 19 will introduce a new design with more translucent buttons, menus, notification banners, and more, and there is now another clue that points towards this glass-like appearance. Bloomberg's Mark Gurman today said the new design project is codenamed "Solarium" internally. A solarium is a room with glass walls that allow in plenty of sunlight, so this...
Facebook Feature

Facebook's New iPhone App Feature Turns the Clock Back to 2007

Thursday March 27, 2025 1:59 pm PDT by
In the mid-to-late 2000s, Facebook was all about staying connected with friends and family. However, as the social media platform added new features and grew over time, that core experience began to get drowned out. That changes starting now, according to Meta, which today introduced a new feature that will "bring back the joy" of classic Facebook. Specifically, Meta has redesigned the...
Foldable iPhone 2023 Feature Homescreen

iPhone Foldable Display Said to Feature iPad-Style 4:3 Aspect Ratio

Friday March 28, 2025 3:44 am PDT by
Apple's upcoming "iPhone Fold" will feature a foldable screen with a 4:3 aspect ratio, according to a Chinese leaker who previously leaked the book-style device's display dimensions. The Weibo-based account Digital Chat Station claims that Apple will adopt a "roughly" 4:3 aspect ratio on the inner display in order to achieve consistency between the outer display, as well as to ensure parity...