Budget 2000: UK multinationals take the big hit in the Budget.
UK companies with overseas subsidiaries will take the big hit from Budget 2000, according to experts at KPMG.
Speaking at a breakfast briefing this morning Ian Barlow, UK head of tax and legal, said: ‘This is a big budget particular for big business’ and warned the UK would be seen as a less attractive base for international business as a result of changes to double tax relief on dividends.
‘Combined with further tightening of the controlled foreign company rules, this will not encourage the use of the UK as a headquarters location against the advantages of competitor locations such as the Netherlands,’ he said.
Gordon Brown yesterday announced that as of 1 July tax on dividends from overseas subsidiaries will be capped at 30% and ended the practices of companies specifying which profits on which it will pay a dividend. The measures seriously curtail the use of so called ‘Dutch mixers’ for reducing the tax liability of UK multinationals.
Joy Svasti-Salee, head of international tax, told hundreds of KPMG clients assembled at the Dorchester Hotel for a Budget breakfast, that though the chancellor had invited consultation on the measure there was precious little time.
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