KPMG calls for controlled foreign companies dialogue

UK-based companies with offshore divisions are being encouraged to enter into
talks with the Treasury before new proposals on the taxation of the overseas
arms are finalised.

KPMG said companies seemed hesitant to respond to a Treasury discussion paper
that outlined sweeping changes to the tax treatment of offshore operations.

The government’s tax policy chiefs have offered an olive branch in the form
of plans to exempt foreign dividends from tax, but companies are being urged to
open discussions and ensure that the proposed anti-avoidance measures for
controlled foreign companies are not excessively constrictive.

Sue Bonney, the Big Four firm’s head of UK tax said: ‘Our plea is to respond
to it and engage in the debate and shape what finally comes out… If UK
business fails to engage with the authorities, it will be on shaky ground if it
later complains about the final shape of the reforms.’

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