American CEOs, fried in British pan

The top executives of three American MNCs —- Google, Amazon and Starbucks were fulminated by British MPs, on allegations of tax avoidance.

The rarest of the rarest event happened when these executives were called before the House of Commons’ Public Accounts Committee, to explain, their company’s complicated tax arrangements. It has enabled them to maintain minimal liabilities in Britain. The companies are accused for reporting losses in high tax countries like Britain and profits in low tax countries like Luxembourg. The corporations have been charged with diverting hundreds of millions of pounds to what The Guardian describes as “secretive tax havens” through manipulative accounting practices.

Britain, like other European Union countries has set in motion the tightening of tax rules. They have deliberately done it to come out of the economic crisis they face. The measures are expected to surface out tax evading corporations and individuals. The Government’s crackdown on tax dodging could bring £4bn this year itself.

The tightened tax net is an outcome of the concerted effort of forums like G-20.  Britain is a signatory to the recent agreement of G-20 on tax evasion.

Since 2008 economic crisis USA has been in the forefront to fight against tax havens and tax avoidance.

It is a paradox that US companies themselves are facing trials for similar charges.