Federal Budget 2015: ‘Googletax’ or Multinational Tax crackdown line?
The Treasurer has said that, “It is vitally important, vitally important that a business, wherever it is located, pay tax in the jurisdiction where it earns the income.” In April, the UK introduced a 25% tax on diverted profits created by activity in the UK. The intent is to “target large multinational enterprises with business activities in the UK who enter into contrived arrangements to divert profits from the UK by avoiding a UK taxable presence and/or by other contrived arrangements between connected entities.” The new tax rules apply to entities with sales revenue in the UK greater than £10m.
If the Government acts on this issue in the Budget instead of waiting for the tax review, it’s likely we will see this UK style of tax apply.
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