Taxing multinationals, and the public accounts committee: is there a place for common sense?
Following the sessions of the public accounts committee with Google and the HMRC, many commentators remain uncomfortable that US multinationals with significant UK operations can legitimately claim not to be taxable in the UK.
The committee itself was clearly puzzled that evidence given to it by ‘whistleblowers’ did not fatally undermine Google’s own position. Answering criticism last week that the committee does not understand the underlying tax principles well enough, Mrs Hodge challenged tax professionals to explain in ‘common-sense’ terms why the ‘anger’ felt by members of the committee and the public was misplaced. So here goes.
The question the committee was wrestling with is how it can be possible that an organisation that conducts sales activities in the UK, with UK customers and using UK employees, is not taxable on the profits from those sales. The answer is that it is, but in a way that reflects the division of activities between the UK business and the business elsewhere…
If you are registered and logged in to the site, click on the link below to read the rest of the Allen & Overy briefing. If not, please register or sign in with your details below.
News from Allen & Overy
News from The Lawyer
Briefings from Allen & Overy
The ITC has reaffirmed its power to ban electronic transmissions from the US where those transmissions infringe an intellectual property right or are otherwise based on an unfair trade practice.
A new French law, the ‘Law to recapture the real economy’ (‘Loi visant à reconquérir l’économie réelle’ or ‘Loi Florange’), was made on 1 April 2014.
Analysis from The Lawyer
Imagine you’re the general counsel of London-based private equity investor BC Partners. You’re sipping on your coffee, hashing out the details of your imminent £382m investment into UK-based business publishing company Mergermarket.
‘Exotic’ investors and opportunities for legal work beyond M&A feature in The Lawyer’s high-level roundtable debate on south-east Europe