Afternoon:
9°c
Companies in tax victory on foreign profits
22 Apr 2009Three years of fraught negotiations between Treasury officials, company finance directors and tax experts were set to bear fruit today as Chancellor Alistair Darling announced that most foreign profits earned by UK companies would be exempt from tax in this country.
The package has been debated since 2006 and even today will not be presented in its final form. The "worldwide debt cap", which would limit the amount UK companies can use interest charges by foreign offshoots to offset UK tax bills, could still be delayed.
The foreign dividend exemption will cost the Treasury money but the debt cap is set to become a revenue earner.
Reader views (2)
You might be surprised. A lot of UK companies have cash overseas which they can now bring back to the UK tax-free. (Bear in mind that it will often have paid some tax overseas, so this is not a tax dodge). If they use it to pay off debt, then interest costs go down and their taxable incomes go up. If they invest it in their businesses here then they will make more profits and... oh taxable income will go up too. Bit like when income tax was cut to 40% and the tax paid actually went up.
- Tax Geek, London, 23/04/2009 09:41
Report abuse
Another hole in the Government's coffers, ust when we dont need any more. Thanks Darling and Brown.
- Dave Davies, Basingstoke, 22/04/2009 09:23
Report abuse
