[LONDON] Britain plans to introduce a 25 per cent tax to target multinationals such as tech companies Google and Amazon accused of using complex accounting schemes to cut their payments on earnings.
"We will make sure that big multinational businesses pay their fair share," finance minister George Osborne said in a half-yearly budget statement on Wednesday.
"Some of the largest companies in the world, including those in the tech sector, use elaborate structures to avoid paying taxes," he told parliament.
Companies including Google, coffee shop chain Starbucks and internet retailer Amazon have paid minimal corporate tax in Britain by shifting revenues to low-cost tax jurisdictions, for example by using a system of internal payments.
However, tax experts cautioned that a move to rewrite global tax norms would be very difficult to enforce unilaterally.
Mr Osborne said he would introduce a 25 per cent tax on profits generated by multinationals "from economic activity here in the UK which they then artificially shift out of the country".
He said Britain was leading the world in taking such a step, and he predicted the new Diverted Profits Tax would raise more than one billion pounds (US$1.6 billion) over the next five years.
Toby Ryland, partner at HW Fisher & Company chartered accountants, said the so-called 'Google tax' sounded great in principle but was unlikely to give the average multinational much cause for concern.
"In reality, many of the UK's double tax treaties with other countries dictate where profits can be taxed," he said. "Sweeping measures like this often come to nothing. The Chancellor (Osborne) has made the right noises, but most multinationals will be able to side-step these new rules without breaking into a sweat."
Google declined to comment while Amazon was not immediately available for comment.
The details of how the tax would be levied would come in the coming weeks, deputy finance minister Danny Alexander told the BBC. Britain could introduce the tax without changes to international agreements on tax treaties, he added.