Multi-national companies would be prepared to open their books, on an anonymised basis to convince the Treasury to introduce a tax exemption for inbound dividends.

The issue of the exemption is at the heart of a debate on taxing multi-nationals foreign subsidiaries. The Treasury wants to drop the taxes on inbound dividends to help simplify company structures, but is worried there will be large scale tax avoidance as a result.

A poll by PricewaterhouseCoopers shows that 80% of companies would be open to providing information on their affairs as part of an impact assessment.

90% of them were in favour of the dividend exemption, PwC added.

Peter Cussons, PwC tax partner, said: 'One of the original objectives of the initial discussion was to address UK competitiveness. It remains the case that multinationals are still supportive of the introduction of a dividend exemption, and following the Government’s recent response the only route to getting such an exemption in 2009 would be by offering evidence that the fiscal risk could be manageable.

'PricewaterhouseCoopers would accordingly support business and Government working together with a view to bringing in the dividend exemption as quickly as possible. Working with businesses would help to ascertain to what extent there would be an increased repatriation of both historic foreign reserves and future foreign profits, and the positive effect via repatriation of profits to the UK and any unwinding of upstream loans that this should have on the UK tax take.'

Further Reading:

Read the Treasury's consultation on the issue

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