TaxCorporate TaxBattlelines drawn in CFC conflict

Battlelines drawn in CFC conflict

As the crucial consultation on the taxation of foreign profits closed at the end of last week, battle lines were already being drawn as between the revenue authorities and tax advisers

The
consultation
document
proposes a series of wide-ranging reforms to corporate taxation,
including the exemption of foreign dividends from tax, new controlled foreign
company rules and restrictions to interest relief in the UK.

The foreign dividend rules have been welcomed, and although there are
concerns about reducing interest relief according to a multinational’s debt
global levels, Treasury proposals have been broadly well received.

But in the area of CFCs stark divisions are emerging.

Current proposals will require groups to separate all foreign income as
either ‘passive’ or ‘active’, raising fears of increasing red tape and
bureaucracy.

‘It is unrealistic to expect international companies to go through every
minute detail of foreign income in order to decide whether it is active or
passive,’ says Grant Thornton international tax partner Heather Self.

Related Articles

Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

Corporate Tax Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

2m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

2m Emma Rawson, ATT Technical Officer
EU divided over radical tax reforms targeting tech giants

Corporate Tax EU divided over radical tax reforms targeting tech giants

2m Alia Shoaib, Reporter
‘Improve rather than lose’ disincorporation relief, tax body urges

Administration ‘Improve rather than lose’ disincorporation relief, tax body urges

2m Austin Clark, Reporter
How to educate your clients about tax avoidance

Corporate Tax How to educate your clients about tax avoidance

2m Clear Books | Sponsored
CGT clampdown nets HMRC £124m – but could lead to increase in use of avoidance schemes

Corporate Tax CGT clampdown nets HMRC £124m – but could lead to increase in use of avoidance schemes

3m Austin Clark, Reporter
‘Google tax’ nets HMRC £281m

Corporate Tax ‘Google tax’ nets HMRC £281m

3m Emma Smith, Managing Editor
Should I incorporate my buy-to-let business?

Corporate Tax Should I incorporate my buy-to-let business?

4m Emma Rawson