U.K. Treasury chief Osborne tells U.S. tech giants: Read my lips, more taxes

“U.K. Treasury chief George Osborne has put global tech companies on notice: Pay your taxes, or else,” Lisa Fleisher reports for The Wall Street Journal. “‘Some technology companies go to extraordinary lengths to pay little or no tax here,’ Mr. Osborne said at his party’s annual event. ‘If you abuse our tax system, you abuse the trust of the British people. And my message to those companies is clear: we will put a stop to it,’ he said.”

“Mr. Osborne, speaking at his Conservative party’s annual conference in Birmingham, England, said the Treasury expects to raise hundreds of millions of pounds by cracking down this fall on companies that avoid paying tax on profits in the U.K. by shifting profits internally across national borders,” Fleisher reports. “These types of transactions can be difficult to spot and evaluate. At times, one part of a company might pay another part of the same company for goods or services. The difficulty comes in making sure those prices are the same as would be fetched on an open, competitive market. The Conservative party said it would try to better implement international tax rules that help determine prices of those internal transactions.”

Read more in the full article here.

Related articles:
Irish taxes: There is no possibility of a fine upon Apple whatsoever – September 29, 2014
EU watchdog to give reasons for inquiry into Ireland’s tax treatment of Apple – September 29, 2014
European Commission accuses Apple of prospering from illegal Irish tax deals – September 28, 2014
EU threatens expanded probe into Ireland’s tax practices regarding Apple, Googles, other companies – June 20, 2014
EU’s investigation of Apple’s taxes isn’t going to cause the company any problems – June 13, 2014
EU launches tax avoidance investigations on Apple, Starbucks, Fiat – June 11, 2014
Not in Taxes anymore: On site at Apple’s famous Irish ‘headquarters’ – November 2, 2013
Regan: U.S. tax code spurs loveless foreign corporate ‘marriages’ – May 13, 2014
Ireland to close Apple’s tax loophole, but leave bigger one open – October 15, 2013
G20 think tank OECD proposes blueprint for global crackdown on tax avoidance – July 19, 2013
Thomas Sowell on Apple, corporate taxes, and ‘the road to serfdom’ – May 28, 2013
Taxing Apple just taxes you – May 24, 2013
Don’t tax Apple, tax its shareholders – May 24, 2013
If Apple paid more tax, we might pay less or something – May 22, 2013
Apple CEO Tim Cook pounds another nail into the Keynesian coffin – May 22, 2013
Apple CEO Cook makes no apology for company’s tax strategy – May 22, 2013


    1. When a country like the U.K. takes money from a publicly traded company like Apple, they are taking the money from the investors who already paid taxes or will be paying taxes on the money they used to invest in that company. Many of whom are in their country. So, what they are saying to those relying on those dividend checks is that we are going to take your money to distribute it as we see fit to secure our government jobs using your personal money.

      1. I don’t get your problem with this. Profits and dividends from investments are still income, and therefore subject to income taxes.

        All money has been previously taxed, every last penny of it.

      2. What we forget is that if you don’t tax corporations you have to tax people. In the US, they tax corporations higher, so people don’t get taxes.

        It’s easier to collect from a corporation, than your people. It also meets with less resistance.

          1. True. Which underscores the point that a smaller, more efficient government would tax corporations significantly but fairly, and eliminate the income tax. The income tax is the most cheated, complex, impossibly to enforce legislation in history, and it has never proven effective at funding the things that citizens demand. If I recall correctly, some analysis was done that showed about a 30% VAT tax on corporate trading/retailing/sales with no income taxes on citizens and no loopholes would yield the same revenue with a fraction of the current IRS overhead. Wall Street lobbyists, of course, suddenly reversed their claim that trading commodities shouldn’t be considered adding value, and therefore should be exempt from such a VAT tax. Schmucks.

      3. Which is not a problem. Maybe no one should pay taxes and we just have a free for all where just the rich get everything and all the serfs fend for themselves. Oh wait the US is trying that now, my bad.

    1. Right. We don’t need hospitals, airports, national laboratories, libraries, museums, bridges, universities, armed forces, courts, border patrol, FBI, FAA or any of that other useless stuff.

      1. Surely you must realize that politicians spending other people’s money with vote collecting in mind rarely purchases the things you listed with economy in mind.

        The armed forces alone are completely broken economically with even simple things as bases being placed and funded according to local politics.

        NASA is a good example in that funding for it is divided up between contractors in different states as pork, when it could operate an order of magnitude more cheaply by downsizing and centralizing development.

        So yes, we could have all those things and less spending.

      2. Granted this is a movie.. but sadly spending like this is real.
        Haven’t watched it in years, so can’t exactly say i’d agree/disagree with the way the budget was “fixed”. I just always remembered this section as funny.
        (For those that don’t know, the movie is called “Dave” Kevin Kline is not the president, he was hired to act as the President while the real President is ill)


    2. “Read my lips. Less spending.”

      Better yet: “Read my lips. SANE spending.”

      Less vs more is mere 1 dimensional thinking, not unlike our stupid political party system. There’s a lot more to spending that CUTTING or BLOATING. The question is: Are you spending sanely? Or insanely? The world has way too much of the latter.

      1. Indeed, and according to economists it put back our economic recovery by 18 months to 2 years. People forget that government spending goes right back into the economy, from which it gets taxed again as it moves around. It’s not like managing your own bank account.

    3. @84 Mac Guy: if you’d watched, listened to or read Osborne’s speech, you’d have known that he is indeed cutting social benefits for the poor and unemployed. And cutting taxes for the wealthy. It’s all part of the European commitment to austerity that has Italy officially in a triple-dip recession, European wide unemployment still at high levels and economic growth at dismally low levels, and even the “crown jewel” Germany stuck in recession. Thank god the US didn’t follow that same path.

  1. I’m fine with it as long as all companies are affected, not just the most financially successful. Facebook and Google should have to pay their fare share as well. Or are they exempted because the intelligence services love them?

  2. And this relates to Apple how?

    Apple’s main intentional office is in Ireland anyway, not in UK. Also, Apple pays all necessary taxes from its UK’s sales. Of course, profit distribution is optimized so UK’s profits would be only as big as necessary due to higher taxes comparing to the distributor country of Ireland. But this is perfectly legal and is used by basically all companies.

    1. Not in UK? When did Ireland leave the UK? This is big news, funny my Irish relatives have not mentioned it to me. You must be mistaking them for Scotland. Oh no, thats right, Scotland did not separate. You need a newer geography book my friend.

        1. Ed, you know, you are correct. I have been to Ireland a number of times but never to Cork. I stand corrected. I called my Uncle in Ireland and he said Cork has not been part of the UK for about 80 years. He told me that is why the American companies all have offices there because the can duck almost all taxes. Everyone know that he said.

    1. The problem is any new tax laws will not written by just anyone, they are written by lobbyists for the congress. Lobbyists are paid by whom? Corporations of course. As long as politicians are bought and owned by big money we will never see fair taxation. Billions of dollars are spent to convince all of us that Corporations and rich folks are overtaxed. If we would just end all taxes on millionaires and billionaires the budget would balance is their theory.

      1. Lobbyists write bills? You may want to rethink that comment. Influence? Certainly!

        But you miss the mark of reality of the kitchen table economy.

        I don’t care how much corporations pay or do not pay.

        I care about what I pay. City, County taxes have been going up every year and for what? Fat public sector union salaries and benefits,

        Animal farm.

        1. I’m afraid you’re wrong, GoeB. Lobbyists often do indeed help draft bills. As a prize for helping persuade the politicians to do their bidding, they get the job of drafting the leglislaton involved. Not the whole bill probably, but certainly critical clauses. And committees, etc. have the final say. But the lobbyists provide the initial language for important clauses.

          1. Such a shame that representatives are too lazy to do the work we hired them to do. Lobbyist-written legislation should be Constitutionally banned. If a lobbyist wants to propose legislation, he should write a letter to the ONE representative delegation that serves his organization’s headquarters location, and all letters to elected officials should be publicly posted for all to read. Special insider access for the rich multinational corporations is corroding the republic from within. It has already stagnated middle-class wages for the last 1-2 generations, it has eliminated the vast majority of domestic manufacturing, and now it is decimating small businesses by the thousands. Local businesses and citizens deserve a chance to speak to their representatives on an even playing field.

          2. My Congressman, boyhood friend and old drinking buddy, says it does not happen in his office, nor does he know of it elsewhere.

            But if what you say is correct — it should be illegal. Influence money is already out of hand.

  3. So many people on the dole over there,mint be an uprising till they bled the rich dry and have nothing left.

    Life, liberty and the pursuit of PROPERTY! The original line struck down by our founders because, well, they wanted a little power to protect their own interests.

    1. Which socialists? The corporate socialists (crony capitalism) or the entitlement state malingerers?

      Every business in America extracts a laundry list of tax exemptions, rebates, site improvements, training subsidies and all the rest before they will locate a business. This is simply corporate welfare and costs us a fortune at every level of government.

      Some states are now granting companies rebates of the payroll taxes withheld from their employees paychecks. Otherwise, the money deducted from your pay check for line item state taxes is actually given back to the employer.

      Welfare comes in many forms.

      1. Technically it’s a Conservative-led coalition government. Some of our American friends might explode with this explanation but our Conservative Party governs side-by-side and collaboratively with the Liberal Democrat Party.

        Osborne’s comments are irrelevant BTW. The Conservatives currently have a Tea Party-esque Thatcherite offshoot called UKIP nipping at their heels as they go into next year’s election. It’s going to split their vote and allow the centre-left Labour Party to pass right through the middle and into five years of office. So there’s absolutely no chance of Osborne ever being able to put the ideas in this speech into practice.

  4. LOL

    it would be hilarious if Apple announced tomorrow they were planning for a long time to shift their financial HQ to London and process ALL their EU profits through London! (and Apple is huge big money monster) The other EU other ministers would wag their fingers at London : “no, no , didn’t your Finance guy say that you can’t move profits across borders? German, Swiss, French etc profits can’t be processed in London.. ” The Brit Treasury Guy would puke…

    Currently the Apple EU tax fight is between Ireland which is very happy to process all Apple’s EU taxes and the rest who are missing out.

    One of the leaders ( next slated President of the Commission) of the current EU probe into tax rules is from Luxembourg where in the past he used to design instruments to convert Luxembourg into a tax heaven! …..

    NYT sept 29:
    “Any decision to punish Ireland for inducements to Apple could be awkward for Mr. Juncker, who has been accused by his opponents of helping to turn Luxembourg into a tax haven during his nearly two decades leading the small, wealthy country.”


    in short…
    Govts.and Leaders do not really care about the intrinsic right or wrong, they are just doing stuff for their immediate advantage…
    and they often serve B.S to voters…

    1. Why would this make HMRC “puke”? Tax take for the UK would increase if only the profits on UK income were declared here. No need for income earned elsewhere to be funnelled through the UK.

      I don’t see this as applying to Apple BTW. Their Cork operation is a genuine regional EMEA HQ, with a couple of thousand employees and a real distribution and support centre. It’s not just a skeleton staff sales office and a postal address.

      Google are more of a target for these measures.

      1. hey stupid, if the UK wants to raise cash, shitcan the entire “royal” family of shallow gene-pooled parasites and have them all get jobs like the poor, working Limey stiff that pays for their lifestyle from the 12th Century….I’m sure they’re tired of hearing about which shade of blue Aston Martin best matches Kate Middleton’s wedding dress.

  5. Take it from a liberal/progressive:

    We (The US) collect more than enough money in taxes from all sources to meet the needs of society that government traditionally provides. Graft, cronyism, earmarks, kickbacks, bribes, overcharging, incompetence, waste, malfeasance, malingering, corporate welfare and the National Security State eat up so much as to cause the problem.

    Further, I have no faith that either major Party has any intention or ability to make a serious dent in the problem. They both have entrenched constituencies that want their turn at the trough and some of the constituencies support BOTH parties.

    There are a small number of elected officials that approach their position and duties seriously, but cannot make much headway against the inertia of the status quo.

    1. Correct that enough money is collected to cover expenses.

      Correct that money is wasted.

      Incorrect that both parties are the SAME. Typical Democrat political tactic, nothing more.

      Republicans have been saying for years we do not have a revenue problem, we have a spending problem. Public sector unions, anyone?

      But what I don’t appreciate is you and others like Derek Currie consistently selling the false narrative that it is a 50-50 proposition and both parties are equally culpable. Nothing could be further from the truth.

      Wake up!

      1. 1-Actually the problem is not public sector unions- a common Republican complaint. Most Federal workers make LESS than their private sector counterparts- especially true for Professional grade employees.
        2-Republican tax expenditures are just as expensive as any social welfare program. The money just goes into better lined pockets.
        3-Republicans only rant about the deficit when a Democrat is in the White House. Dubya turned a surplus into a huge deficit and not a peep was heard from the GOP leadership in either house.

        BTW- The last Republican President to submit a balanced budget was Dwight Eisenhower and he would barely qualify as a Republican and was no NeoCon. Nixon, Ford, Reagan, Bush and Bush all ran massive deficits.

        1. More lies parroted by a low-information Democrat apologizer.
          1) Public employees do indeed earn more than their private counterparts. And, factor in their generous pension programs, their total compensation far exceeds the private sector.
          2) There is no single expenditure (let alone a “Republican tax expenditure”) as big as our social welfare program which was $920 billion in 2010. This is 50% bigger than the U.S. military budget. Add in Social Security and Medicare and the cost was almost $2.3 trillion. This is 60% of the total federal budget.
          3) Obama’s biggest deficit is four times as big as Bush’s biggest deficit. EVERY SINGLE ONE of Obama’s deficits are bigger than Bush’s biggest deficit.
          The last (almost) balanced budget was given to us by a Republican Congress and practically forced down Bill Clinton’s throat.
          The most excessive U.S. deficit (by far) was given to us by Democrats in Congress and Barack Hussein Obama. Following that, the Democrat-controlled Senate failed to pass another budget for several years despite the fact that it is required by law every year.

          1. First of all I am no apologist for Democrats. I did not vote for Obama in 2008 or 2012.
            Second, Public employees who work in skilled/licensed professions earn LESS, verifiably so in numerous salary surveys. The current pension system is also far less generous than in the past.
            Third, the RepublCONs did not force the balanced budget down Clinton;s throat- it was made possible by the TAX INCREASE passed by the then Democratic Congress. That very issue fueled the 1994 Contract ON America, but the RepubliCONs did not repeal the tax increase until years later during Dubya’s reign of ignorance.
            Fourth, Social Security is funded entirely by it’s own tax and costs the general budget nothing. Not one red cent of general revenue has been appropriated to pay a Social Security benefit.
            Fifth, our bloated Defense budget is hidden partially in the Department of Energy, Department of Veteran’s Affairs and Department of Homeland Security budgets. It is-truth be told- well over one trillion/year.
            Sixth, the correct term in American English would be Democratic-controlled Senate- not Democrat- controlled Senate. Were you home schooled or just parroting HS Graduate and Oxycontin Addict Rush Limbaugh?

            Nice try.

          2. DE plays the same notes over and over – obfuscation and SELECTIVE facts mixed in with Democrat apologies and Republican bashing. Nothing new here.

            Your post has more facts and real life reality than DE’s off topic musing wanderings.

            As soon as you read I am no apologist and did not vote Democrat president in 2008 and 2012, the jig is up … c’mon man!

  6. It is all as predicted in Ayn Rand’s “Atlas Shrugged.” Soon the producers will “Go Galt” and the moochers and looters can fight over the nothing that is left.

    1. “There are two novels that can change a bookish fourteen-year old’s life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs.” — John Rogers.

  7. I wish these government officials would stop the bloviating. All Apple wants to do is take advantage of the tax laws as every other company does. If the government officials don’t like that, change the laws to affect every company. Don’t just go after individual companies because they’ve been the most successful at applying the laws as written to benefit their shareholders. In the U.S., Apple pays near the top, if not the highest, rate of any other large company in corporate taxes.

    Remember, companies don’t pay taxes, people do. I agree with the poster above. The U.S. government collects plenty in taxes, but the politicians just choose to misapply it to war profiteering, or programs that benefit just their constituents (including special class donors), rather than spend it on common infrastructure and other common goods that the taxes should be spent on.

  8. What the heck are you folks speaking about “…pay their fare share…” that is such a stupid comment. Based on the existing tax code we all pay our fare share. It is those that do not file taxes that do not pay their fare share on income. Then again, each time they purchase something they are paying their fare share of taxes.

    It is not that the government does not take in too few dollars, it is two things, 1. Regardless how much a government takes in they over spend, 2. Constituents learned they can vote their pocketbook, thus they vote for folks that will give them free stuff, handouts, and the like.

    It is the government that caused these tax problems not businesses. Before you beat up on big business saying they are greedy, ask yourself this: did you ask for a raise in pay, if so are you going to work longer, harder, more diligently, etc. If not they you yourself are quite greedy. Not go get a job from a poor person.

    1. well, lets assume that you and any number of other posters get their wet dreams to come true

      corporations no longer pay taxes, and unions are busted and peoples incomes fall… then what ?

      do you imagine that corporations will generously lower their prices, or might they just view this as an increase in profits to which they are justly entitled ?

      do you or they overlook that as the american public, and middle class in particular have less and less expendable income they have less to spend to buy corporate made products ?

      sure proctor and gamble will do ok we alway need soap and toothpaste and cleaning products and toilet paper. and food giants like general mills and archer daniels midland will do fine, we all gotta eat.

      might not be able to afford new cars, or houses though, iphones might get a bit pricey, but there are always samsung products, airlines might not do so well, travel is getting pretty expensive

      so if the govt. lowers our individual taxes (on our decreasing incomes – if my total federal income taxes were eliminated, i would have about $4000 more in my pocket per year – that might keep me in cigarettes, if i smoked) ) that means less money for upkeep of infrastructure, less oversight of wall street (we have already seen how well that has worked out) or drug companies or food producers, and way less money to support our defense.

      i think your dreams would soon turn to nightmares, for everyone.

      then what ?

  9. Tough words.
    Now more companies will leave England and there will be even less jobs.
    The problem of fair taxation requires a worldwide solution and it does not mean to tax companies out of existence. They do need to pay a fair tax. And the governments need to spend less.

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