Wednesday, 21 September 2016

UK prepares the way for cross-border tax transparency before the EU gets started

Reported by law firm news service out-law.com on 07Sep2016, UK MPs vote to empower UKGov to require corporate taxpayers to disclose country-by-country tax payment information in their annual reports.

On balance, I consider this good news, in part because it’s harmless politics.

Of particular note is that UK Parliament has authorised UKGov to permit (or oblige) something that UKGov hasn’t yet properly considered, as if UK Parliament and the OECD are patiently waiting for UKGov to keep up.

Of even more particular note is that UK Parliament is ahead of the European Union.  In effect, UK Parliament has authorised UKGov to do something before the EU has even drafted a coherent directive.

And yet, whatever consultations might have taken place so far, the EU’s efforts are already largely undermined because of the European Commission’s crass decision against Republic of Ireland re Apple.

How likely is the European Union’s proposed directive going to be moulded by a desire to use this ‘transparency’ as a means of protectionism by the European Union against non-European Union corporates? Would it become a form of corporate-racism-by-proxy?

Meanwhile, UKGov forges ahead with its own plans for publishing at least a corporate taxation strategy.  Whatever that actually means.  UKGov has published guidance to corporate taxpayers, which accounting firm BDO has attempted to re-hash into something more vivid.

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