NEW TAX LAWS should be urgently reviewed in light of their potential impact on developing countries, MPs in the International Development Committee have said.
Depending on the findings of the committee’s report, Tax in Developing Countries, the government should consider whether some of its finance bill proposals should be shelved, reports the Guardian.
The 2012 finance bill proposed easing anti-low-tax regime laws and controlled foreign companies rules.
The new CFC rules – which will apply to accounting periods beginning on or after 1 January 2013 – are directed at companies that artificially divert UK profits to low-tax territories or other favourable overseas tax regimes to reduce their UK tax liabilities.
The report highlights the significance of tax collection in developing countries, noting it is far more reliable as a source of income than aid. ActionAid estimated the cost to developing countries could be as much as £4bn, a figure the Treasury does not recognise.
Lucia Fry of ActionAid told the Guardian: “The international development committee has rightly recognised just how fundamental tax revenues are for developing countries. Tax avoidance is now a major global concern, and the UK needs to take into account the impact of its own tax regime on the world’s poorest countries.”
The Treasury, however, said the rules safeguarded UK tax revenues and were not designed to protect those of other countries.
CIoT has warned that businesses undertaking some commercial transactions will face unnecessary uncertainty because of a lack of clarity about the breadth of a new anti-avoidance tax rule
Former PwC employees Antoine Deltour and Raphael Halet have been found guilty for their role in the Luxleaks scandal
Four men have been jailed after HMRC rumbled a £100m tax fraud film scam
The accountancy world has reacted to the news that the UK has voted to leave the EU