Multinational Corporation Maximise Profit Case Study

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Multinational corporations are trying to maximise their profit in any way. They can go around the law and almost do not pay taxes. They do not think about people’s reaction, government reactions or their reputation. They know that they are going to have supporters no matter what they are doing. But can they actually maximise profit and pay less taxes than their employees?
It started in the United Kingdom when some MPs accused the HMRC that they are not collecting enough taxes from big corporations. They mainly focused on foreign businesses that have branches in the UK. The law states that they should pay specific amount of tax if they have a branch in the UK, but these corporation were accused of tax avoidance by claiming low amount of profit, so they are able to pay low amount of taxes. For example, Amazon claimed more European sales than UK sales through their Luxemburg warehouse. MPs considered tax avoidance as an insult to the British legislation and tax payers. As a response from George Osborne, he declared that more staff have been recruited to start chasing corporations trying to avoid …show more content…

They claim making more sales and transferring money to pay their loans, debts and buying expensive stock to their UK branches, but at the same time they transfer a huge amount of money to shareholders based on British branches profit.
Businesses are trying to reduce their corporation taxes as much as they can, but at the same time they cannot hide their sales figures. That causes for the government what is called a tax loophole, which is a chance to business owners to avoid paying fair amount of taxes without breaking the law. It is very easy to create a tax loophole in Europe as it is a free trade area. As a response for the English government, Osborne announced that he will work with other European countries so they can avoid tax

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