Corporation tax; Multinational companies

 


Is it right that a company with high sales but no profits pays no corporation tax? This was a question raised repeatedly in relation to the taxation of foreign multinationals with sales here in the UK. The question, debated in places such as the Public Accounts Committee, has led to proposed reforms by the OECD, that have been accepted by the G20 and many others, in corporate tax regimes around the world in relation to how profits are calculated and allocated to activity.  But the issue is more fundamental than the international rules – it is more about the role and purpose of corporation tax. 

Part of an occasional series in which CIOT tax experts explain the background to topical issues