The Chartered Institute of Taxation (CIOT) blames the lack of pre-consultation on changes in successive Budgets and Pre-Budget Reports for the present climate of uncertainty prompting multinationals to eye alternative tax bases.
‘Regarding the substance of the recent proposals on foreign profits, the Government does have a need, which we recognise, to protect the corporate tax base,’ Ian Menzies-Conacher, chairman of the CIOT technical committee, said.
He noted the 'controlled companies' regime in the foreign profits proposals would be very 'compliance-burdensome’, requiring detailed annual calculations for many, if not all, overseas subsidiaries of a UK headed group or subgroup.
He said that, historically little revenue had been raised on profits earned outside the UK, 'appropriately so, as they are mostly taxed in other countries, sometimes at high effective rates'.
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