A twenty-five percent tax was announced by the George Osbourne, Chancellor of the Exchequer in the UK. The tax is meant to seal any legal loopholes used by multinational companies who handle their profits through countires within the UK with low taxes.
While it targets several multinational companies, the tax has been nicknamed a “Google tax,” as Google is one of the face companies said to benefit from such practices. One of the primary countries used by multinationals is Ireland which recently pursued legislation to close up the “double Irish” loophole.
The goal is that will make the UK as a whole a market where shifting profit to tax havens just isn’t worth it. For companies like Apple, Google and Microsoft it will mean another tax haven will be dried up and more cash paid out. It puts them in a hard place where profit-wise they’re making a little less and more regulation—especially strict policy—makes a market less attractive to setup camp in, but the market in question has always proven to be one a great on to make profit or has a great amount of potential.
Chancellor Osbourne calls the policy “The Diverted Profits Tax” and it is scheduled to take action in April 2015.