Taxation: Tax Collection

Lord Sugar Excerpts

Thursday 4th July 2013 Lords Chamber

[Lord Newby]

My Lords, the noble Lord raises an important point. Eighty-four per cent of Apple’s non-US operating income was booked by an Irish subsidiary that was not tax-resident anywhere and paid tax at a rate of 0.05%. That is clearly unacceptable and is why the G20 will look at the issue later this month. It will be presented with a report from the OECD that suggests not only what action is needed but sets deadlines for taking it and makes proposals on the resources that are going to be needed to implement the new rules.

[Lord Sugar]

My Lords, the issue here is one of transfer pricing policy by foreign companies such as Apple, where, to put it simply, the prices of their merchandise are inflated and the margins that they make parked outside the UK. The merchandise is then sold on for virtually cost price in our country. Will the Minister consider making an assessment of these companies’ sales and applying a profit margin criterion, based on industry standards? They can argue about it afterwards, including about the disclosure of their true costs.

[Lord Newby]

My Lords, this is exactly the issue which the OECD is looking at currently. Along with the French and the Germans, we have made a significant financial contribution in terms of getting experts working on this. There are a number of ways of dealing with it. The noble Lord suggests one way. The key thing is that we rapidly come up with new rules and get them implemented at an international level.