Tax (Photo credit: 401K)
Current anti-tax haven rules (known as Controlled Foreign Company rules) are designed to deter companies from exploiting low tax rates offered by tax havens. So, if a UK company shifts it profits into a tax haven, the UK tops up its tax bill meaning the company ends up paying the full UK tax no matter where they try to hide their profits.
Although the current tax haven rules aren’t perfect, they cover companies trying to avoid tax in the UK or in developing countries. Proposed changes by the UK Treasury mean the rules will only apply if a company tries to dodge its UK tax bill. If a company tries to move money from a developing country into a tax haven this will be ignored.
The UK government is “talking” tough on tax dodging but it really needs to get its act together and make proper changes. If there was greater transparency in this area, developing countries would have greater power against the multi nationals.
For more information and to sign up for action please go here.
Related articles
- ActionAid says tax loophole will cheat poor countries out of £4 billion (independent.co.uk)
- New tax loophole will cost UK £1bn (liberalconspiracy.org)
- UK corporate tax concessions ‘could cost developing countries billions’ (guardian.co.uk)
