news & Things

Crackdown On Multination Firms’ Tax Avoidance

15th Nov 2021

World leaders in agreement over global tax reform for tech giants.

A new global tax deal has been agreed by the likes of the UK, US, France, Italy, Austria and Spain, in a decision to move away from national DSTs.

A new DST-credit system will ease the transition between the UK’s current DST and the beginning of the global tax system coming into effect in 2023.

An agreement of a global minimum corporate tax rate of 15 per cent on multinational firms has been met this month by 136 countries.

So who do the rules apply to?

The new global tax deal will apply to global companies with at least a 10 per cent profit margin and will see 25 per cent of any profit above the 10 per cent margin reallocated and then subjected to tax in the countries they operate.

The aim of the changes is to crack down on multinational firms who operate mostly digitally, who circumvent taxes by only paying where they have headquarters and not where they operate. The agreement also seeks to deter tax avoidance by filing profits in low-tax-rate countries like Ireland and Luxembourg.

It was found in June, according to the Fair Tax Foundation, that the biggest US tech firms paid almost $100 billion less in taxes over the past decade than stated in their annual reports.

They also state that the ‘Silicon Six’ (Amazon, Apple, Facebook, Microsoft, Netflix and Google’s owner Alphabet) have a severe discrepancy in their income taxes and their revenue. For example, they paid nearly $219 billion in income taxes from 2011 to 2020: about 3.6 per cent of their more than $6 trillion in combined revenue.

You might be wondering who the biggest tax avoiders are.

According to the report, Amazon and Facebook are the biggest avoiders: the researchers claimed that Amazon paid $5.9 billion in taxes between 2011 and 2020, on reported profit of $60.5 billion and revenues of $1.6 trillion.


Since its introduction in April 2020, the DST has netted the Treasury £300 million in the 2020/21 financial year. It charged a 2 per cent on the gross revenues of social media companies, search engines, and online marketplaces.

The revenue that the DST raised will be kept until the new system, ‘Pillar One’, comes into effect. At that point, companies will be allowed to claim back credit against future bills, the difference they paid in tax under DST and what would have been paid under ‘Pillar One’, effective January 2022.

Talks on how the new tax system will be implemented are ongoing in the coming months, with world leaders working out how it’ll be done.


More news & Things

More news & Things

James Crossland in Announcement, cloudThing

cloudThing Are Proud To Be Rebranding As Kerv Digital

Last year, cloudThing joined the Kerv Group to offer our clients even wider services, while allowing our amazing people to remain specialists and focus on what they really enjoy doing, building future.     It was a great fit right from the start as Kerv were always happy to challenge the norm and say they do things […]

Chloe Smith in NonProfit

Initiatives Underway to Improve Diversity In Environmental Workforce In The UK

Steps are being taken in the UK’s sustainability and environment professions to address the lack of diversity, as it stands less than 5% of professionals in organisations within the sector identify as being from minority ethnic backgrounds. The steps involve a data drive, asking the UK’s environmental NGOs and charities to annually report on the […]

Chloe Smith in Health Sector

Billions To Be Raised By Health And Social Care Levy, Massive Reforms To Adult Social Care Underway

COVID backlogs and reforms to adult social care underway with the Health and Social Levy implemented to raise billions. The Health and Social Care Levy has commenced from Wednesday 6th April in order to raise the billions needed for the COVID backlog, as well fund reforms to routine services. In total, £39billion will be implemented […]


NATO Identifies Emerging And Disruptive Technologies – UK To Headquarter The Defence Innovation Hub

NATO to implement the DIANA programme to maintain technological advantage: UK and Estonia to partner on the programme. Critical technologies will be seeing transatlantic cooperation, as the UK is set to be the host of the European HQ of the Defence Innovation Accelerator (DIANA), a programme set for NATO allies to accelerate, test, evaluate and […]

Chloe Smith in Transport

New Bus Scheme Set To Increase Public Transport Use by 10%

20% to 40% ticket price reduction on Cornish buses backed by £23.5m government grant A pilot of cut-fare prices has begun in Cornwall, allowing residents and visitors to enjoy cheaper prices around the far south-west of England. The county has benefitted from a ticket price reduction of between 20% and 40% to incentivise more people […]

Chloe Smith in NonProfit

Legal Proceedings Issued After National Lottery Licence Announcement

For the first time since The National Lottery started, Camelot will not be Preferred Applicant for the National Lottery licence.   A legal battle has been issued by National Lottery operator, Camelot, against the Gambling Commission after it was revealed that Allwyn Entertainment UK was its Preferred Applicant for the fourth National Lottery licence – […]