Ernst & Young has warned that major changes to the taxation of UK-basedmultinationals are hidden in the Budget press releases are major changes which could radically increase their tax burdens.
John Dixon, national head of international tax services for Ernst & Young,said: ‘The reform of double taxation relief means that in future companieswith subsidiaries in high-tax countries will not be able to get relief bysetting off dividends from high-tax countries against dividends from low taxcountries.’
‘Basically, this means that the classic structure – the Dutch mixer -is dead. He has added to the multinationals’ misery by changing the rules forcontrolled foreign companies to stop companies from using the internationalholding company exemption to avoid taxation on interest income.What this adds up to is that all current planning models will have to change.’
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