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UK 'Google Tax' aimed at overseas profits to come into effect on April 1st

UK 'Google Tax' aimed at overseas profits to come into effect on April 1st

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UK Chancellor George Osborne confirmed today that a new tax aimed at corporations diverting profit overseas will come into effect on April 1st this year. Although commonly referred to as the "Google Tax," the new measures will target a large number of multinational companies, including many not in the tech sector such as Starbucks and Vodafone. "Let the message go out: this country’s tolerance for those who will not pay their fair share of taxes has come to an end," Osborne told Parliament during today's budget announcement.

the tax is only expected to raise £360 million

The tax is formally known as the Diverted Profits Tax and will feature a 25 percent levy on companies — higher than the UK's 21 percent corporate tax rate. It's expected that the tax will only apply to organizations with annual revenues of more than £250 million ($376 million). However, there are still many questions as to how exactly the tax will be implemented and which companies will fall into the crosshairs. Additionally, despite the attention paid to the new tax, it's still only expected to raise an additional £360 million a year by 2017/2018. This is a tiny portion of the £3.1 billion that the UK government is planning to raise from all of its anti-tax evasion measures.