Treasury defers tax on foreign profits

Treasury officials have revealed the proposed changes to the taxation of foreign profits are unlikely to be enacted before Prime Minister Gordon Brown calls a general election in 2010.

The delay comes after several companies, including United Business Media and Shire, announced the move of their tax domicile offshore. Several other multinationals, including GlaxoSmithKline and WPP, have also threatened to relocate to more tax-friendly countries.

Chancellor Alistair Darling was expected to release a consultation paper containing controversial proposals for the taxation of profits in multinational companies by the end of July.

However, a person close to the Treasury said it was ‘obviously now not going to happen under the original timeframe’. ‘The consultation period is certainly now going to be delayed,’ the person said.

Further reading:

Darling promises to leave offshore taxes on hold

Dublin's gain is Darling's loss

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