Tom Elliott – 2016 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Tom Elliott on 2016-02-19.

To ask Mr Chancellor of the Exchequer, what steps he plans to take to ensure that all UK-registered companies are subject to the same tax provisions as their UK competitors providing the same services to the same customer base regardless of the official locations of the European subsidiaries of such companies.

Mr David Gauke

Along with most major economies in the world, the UK has a territorial tax system that charges corporation tax on profits earned from economic activity carried out here.

The UK cannot tax profits arising from sales in the UK to the extent that those profits are generated by activities carried on outside the UK.

Multinational companies’ profits are taxed in accordance with internationally agreed principles. The current international tax rules were first developed in the 1920s and the UK is playing a leading role in updating them so they are fit for purpose in today’s modern globalising economy.

Tax avoidance and aggressive tax planning by multinationals requires a coordinated approach to come up with effective solutions.

The UK will continue to be at the forefront of multilateral action through the G20, the Organisation for Economic Co-Operation and Development (OECD) and the EU to reform the international tax standards to prevent aggressive tax planning by multinationals.