Following recurrent reports that many tech big wigs are paying meager amounts of corporate tax in the U.K., Google Inc (NASDAQ:GOOG), Starbucks Corporation (NASDAQ:SBUX), and Amazon.com, Inc. (NASDAQ:AMZN) have since been dragged into scrutiny. The three will face the U.K.’s Public Accounts Committee today, where they will be extensively queried. While the specific questions will vary and cover a wide scope, the committee’s main agenda is to establish whether these companies are conducting themselves in fair fashion, considering the current economic outlook.
All companies will be represented by their executives and the Public Accounts Committee will require the executives to present evidence and commentary on their individual company’s financial practices. There is a notable push for companies to avert tactful tax avoidance schemes and pay their fair share of tax in the U.K. The looming incertitude in the European economy, coupled with frustrations over joblessness and austerity measures, has placed the squeeze on European powers, compelling them to narrow in on companies like Amazon.com, Inc. (NASDAQ:AMZN), Google Inc (NASDAQ:GOOG), and Starbucks Corporation (NASDAQ:SBUX).
At this year's SALT New York conference, Jean Hynes, the CEO of Wellington Management, took to the stage to discuss the role of active management in today's investment environment. Hynes succeeded Brendan Swords as the CEO of Wellington at the end of June after nearly 30 years at the firm. Wellington is one of the Read More
International Business Machines Corp. (NYSE:IBM), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL) have also been dragged into this story of paying paltry shares of taxes. In fact, Apple made the news at the onset of last week after it was revealed that it paid only 1.9 percent in taxes on $36.8 billion of overseas profit.
Back in August, a Google Inc (NASDAQ:GOOG) spokesperson shared insight on the matter. In an interview with ZDNet, the spokesperson was keen to note that Google was operating within the law. “We comply with all the tax rules in the U.K.,” said the spokesperson, adding that the company had greatly contributed to the U.K.’s economy through employment and supporting tech businesses in East London.
While Amazon.com, Inc. (NASDAQ:AMZN), Google Inc (NASDAQ:GOOG), and Starbucks Corporation (NASDAQ:SBUX) all seem to be operating within the law, there is a lot of debate as to whether these companies’ practices are morally acceptable. The U.K. Public Accounts Committee in particular is not amused by the fact that these companies part with only a mere portion in taxes of the millions of dollars they net from their European operations.
Notwithstanding, all these tech companies are operating within the law. As such, the Public Accounts Committee will have to double its efforts in this lopsided situation.