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.
Sign in or Register to continue reading this article
It's quick, easy and free!
Why register to The Lawyer
More relevant to you
News from The Lawyer
Analysis from The Lawyer
Which firms are cutting it in this era of slimline rosters, and who are the GC new brooms making clean sweeps? The Lawyer can reveal all
At the time of its launch Accutrainee was described as a revolutionary change to the training model. Has it proved to be so? Not really.