UK store John Lewis seeks multinationals tax probe

Wed Nov 14, 2012 5:41pm EST

* John Lewis chief says lower taxed rivals threaten UK firms

* Wants level playing field on corporate taxation

* Concern rising internationally over tax loopholes

LONDON, Nov 14 (Reuters) - The head of Britain's largest department store group said on Wednesday the government should examine tax advantages enjoyed by multinational companies such as online retailer Amazon, appealing for a level playing field in taxation.

John Lewis Managing Director Andy Street said international firms operating in Britain but based in low-tax countries posed a threat to the long-term future of British companies.

"You have got less money to invest if you are giving 27 percent of your profits to the exchequer than if you are domiciled in a tax haven," he told Sky News.

"So they will out-invest and ultimately out-trade us and that means there will not be the tax base in the UK. So I do think it is an issue that needs to be examined."

Britain's Treasury department "should look at exactly what is happening," he said when asked about competition from multinational rival Amazon, which bills its European customers from a Luxembourg-based subsidiary.

Street was echoing concerns raised by UK lawmakers on Monday who criticised Amazon, Google and Starbucks executives for not paying more tax in Britain.

The issue of big firms using loopholes to minimise their tax bills is rising up the political agenda, with Germany and Britain leading a drive among the Group of 20 economic powers to make multinationals pay their "fair share" of taxes.

France, where Amazon is fighting a $252 million back tax claim, said on Wednesday it was discussing how to tax internet companies at both national and international levels.

Last month a Reuters report showed coffee retailer Starbucks paid no corporation or income tax in Britain in the past three years and had paid only 8.8 million pounds since 1998. In the same period it sold 3.1 billion pounds of coffee.

Street said he backed the principle that corporate income should be taxed in the country in which it was earned.

"It is to do with what our customers expect around a fair and level playing field. And I suspect our customers do think both companies should be treated in the same way," he added, referring to John Lewis and Amazon.

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