CIOT: poor tax consultation fuels offshore exodus

Institute of Taxation
(CIOT) blames the lack of pre-consultation on changes
in successive Budgets and Pre-Budget Reports for the present climate of
uncertainty prompting multinationals to eye alternative tax bases.

‘Regarding the substance of the recent proposals on foreign profits, the
Government does have a need, which we recognise, to protect the corporate tax
base,’ Ian Menzies-Conacher, chairman of the CIOT technical committee, said.

He noted the ‘controlled companies’ regime in the foreign profits proposals
would be very ‘compliance-burdensome’, requiring detailed annual calculations
for many, if not all, overseas subsidiaries of a UK headed group or subgroup.

He said that, historically little revenue had been raised on profits earned
outside the UK, ‘appropriately so, as they are mostly taxed in other countries,
sometimes at high effective rates’.

Further reading:

HMRC releases draft changes to offshore tax rules

Aberdeen latest to join corporate exodus

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