Google, Amazon and Starbucks in tax payments row

  • 3 December 2012
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Find out why some companies aren't paying tax

Three major companies - Google, Amazon and the coffee shop chain Starbucks - are at the centre of a big row over how much tax they pay in the UK.

Everyone has to pay tax, to keep things like hospitals and schools working. It's usually taken from your wages and what you pay depends on what you earn.

It's the same for shops and businesses in the UK who have to pay corporation tax based on the money they make.

But critics say these three don't pay much tax compared to what they earn.

In a report out today, experts have said the government needs to do more to make sure these big companies can't get away with paying so little tax.

Not illegal

What these companies are doing isn't illegal.

Lots of international companies who sell their products in the UK base their headquarters in countries like Ireland, Luxembourg and Holland, where they don't have to pay as much tax.

The UK-based parts of them then buy things, like the rights to use the company's logo, from their headquarters.

So they make less profit in this country, and pay less money to the UK government.

But is it fair?

But while this isn't against the law, some people think it's not fair for them to avoid paying so much tax.

Smaller companies that only operate in the UK still have to pay the full amount, and can't take advantage of basing their headquarters in other countries.

It's now thought that Starbucks might be preparing to change the way it pays tax, in response to the public criticism.