According to Bloomberg, Amazon and Starbucks were picked out by Britain’s top competition enforcer in a warning over tax structures that may help big companies thwart smaller rivals.
The pair’s ability to profit from international arrangements is the subject of debate in the UK, Competition and Markets Authority (CMA) Chief Executive Officer Andrea Coscelli said in prepared remarks fora speech in New York on Friday, September 7. Loopholes in regulation can potentially hinder the “level playing field” needed for effective competition, he said.
According to Coscelli, both firms have been seen to engage in “complex international tax planning” to reduce their corporate tax rate that isn’t available to local stores and independent coffee shops. “Existing laws in a number of sectors may not be well designed to deal with a new business model,” Coscelli said, specifically citing the discussion on Starbucks’ and Amazon’s tax policies.
The tax arrangements of Amazon and Starbucks have already been targeted by the EU’s competition authority as part of a wider crackdown on unfair privileges doled out to big companies by some of the bloc’s member states.
While the CMA has no formal involvement in the area of tax, it is the first time the regulator has referenced taxation as a competition matter.
Full Content: Bloomberg
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