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UK Budget 2017: Tech giants targeted over royalties

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Source: bbc.co.uk 23 November 2017

The UK government is taking steps to increase the tax it collects from firms doing business online. Rules to prevent online sellers avoiding VAT have also been tightened.

From April 2019, technology groups such as Google and Apple will pay a new withholding tax on the royalty payments they make to their subsidiaries in low-tax jurisdictions.

HMRC will also hold online marketplaces such as eBay and Amazon responsible if sellers using their platforms fail to pay Value Added Tax on their sales.

Chancellor Philip Hammond said: “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.”

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Amazon and Apple caught in latest EU tax crackdown

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Source: bbc.co.uk 4 October 2017

The European Union has launched a fresh crackdown over taxes paid by tech giants Amazon and Apple.

Amazon has been ordered to repay €250m (£221m; $293m) in back taxes after the European Commission said it had been given an unfair tax deal in Luxembourg.

The Commission also plans to take Ireland to court over its failure to collect €13bn of back taxes from Apple.

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Amazon wins $1.5 billion transfer pricing dispute in US Tax Court

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Source: mental.com, 24 March 2017

“Amazon.com Inc on March 23 won a US Tax Court case, fending off IRS transfer pricing adjustments relating to a cost-sharing agreement (CSA) buy-in payment. The transfer pricing adjustments would have increased the online retailer’s taxable income by more than $1.5 billion in 2005 and 2006.

The case concerns a 2005 CSA pursuant to which Amazon.com, Inc., and its domestic subsidiaries transferred to the Luxembourg subsidiary intangible assets required to operate Amazon’s European website business.

Siding with Amazon, the Tax Court rejected the IRS’s recalculation of the buy-in payment, concluding it was arbitrary, capricious, and unreasonable. The CUT method, used by Amazon, was the best method to calculate the CSA buy-in payment, the Court said.”

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