THE ADOPTION of unitary taxation in the UK would be a “daft” idea, according to Accountancy Age readers.
Of the 93 readers polled, 82 felt the system’s adoption would cede too much of the UK’s tax sovereignty to external authorities such as the EU or OECD, while only 11 said it is the most transparent and equitable method of taxing multinationals.
The system sees profits made by multinational corporations declared in each jurisdiction they operate in and taxed accordingly, with the aim of preventing profit shifting and tax base erosion.
However, in a hearing held last week by the House of Lords Economic Affairs Committee (pictured), Deloitte’s head of tax policy Bill Dodwell told the committee would be “completely daft”.
The US operates a similar system between its states, which sees employment driven from one state to another for tax efficiency purposes, the lords heard. Indeed, with as many as 20 different tax methodologies in place, the US does not promote the system to the OECD, the panel comprising Dodwell, Ernst & Young’s Chris Sanger, PwC’s Richard Collier and Mercer & Hole’s Adam Broke said.
That evidence, though, was disputed by representatives of non-government organisations also in attendance.
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