Multi-nationals: We’ll open books to Treasury

Multi-national companies would be prepared to open their books, on an
anonymised basis to convince the Treasury to introduce a tax exemption for
inbound dividends.

The issue of the exemption is at the heart of a debate on taxing
multi-nationals foreign subsidiaries. The Treasury wants to drop the taxes on
inbound dividends to help simplify company structures, but is worried there will
be large scale tax avoidance as a result.

A poll by PricewaterhouseCoopers shows that 80% of companies would be open to
providing information on their affairs as part of an impact assessment.

90% of them were in favour of the dividend exemption, PwC added.

Peter Cussons, PwC tax partner, said: ‘One of the original objectives of the
initial discussion was to address UK competitiveness. It remains the case that
multinationals are still supportive of the introduction of a dividend exemption,
and following the Government’s recent response the only route to getting such an
exemption in 2009 would be by offering evidence that the fiscal risk could be

‘PricewaterhouseCoopers would accordingly support business and Government
working together with a view to bringing in the dividend exemption as quickly as
possible. Working with businesses would help to ascertain to what extent there
would be an increased repatriation of both historic foreign reserves and future
foreign profits, and the positive effect via repatriation of profits to the UK
and any unwinding of upstream loans that this should have on the UK tax take.’

Further Reading:

the Treasury’s consultation on the issue

face global debt cap

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