Controlled foreign companies rules must keep UK commercial

Leading tax advisers are hoping talks with the government on how overseas
arms of multinationals are taxed will end up keeping the UK an attractive place
to do business.

The coalition has
started
an informal consultation on how controlled foreign companies should be taxed
but has stressed that the UK’s tax base will be protected at the same time.

Anneli Collins head of tax policy at KPMG said:

“The government is making all the right noises where business is concerned so
it’s crucial that UK plc remains engaged in the dialogue and fully participates
in the debate over the next few weeks.

“What is really key is that the announcement further indicates that the
current government’s approach is to really try to be commercial and make the UK
more business friendly.”

Under the timetable proposed, interim improvements to the CFC regime will be
introduced in Spring 2011 to make the existing rules easier to operate, making
the UK more competitive.

Full CFC reform is planned for Spring 2012.

Chris Sanger, head of tax policy at Ernst & Young, welcomed the
government settling on a course of action instead of bringing out new proposals
to further cloud the issue.

“Finally, the controlled foreign companies consultation represents more of an
update and timetable for the rest of the fiscal year, rather than any new
proposals.”

Further reading:

IoD
issues controlled foreign companies call