ICC responds to 2015 Budget statement
The International Chamber of Commerce (ICC) has responded to announcements in the Budget speech by the UK Chancellor, George Osborne.
On the new diverted profits tax, John Danilovich, ICC Secretary General, said: “We welcome the UK Government’s efforts to consult business on the introduction of a ‘diverted’ profits tax in recent months. We need to review the details of the proposed legislation and we hope it will be implemented in a practical and measured manner.
ICC believes that it is very important that the UK’s diverted profits tax should not catch day-to-day business transactions leading to competing international tax claims and double taxation.
We’ve seen a number of other governments put forward measures recently that cut-across the BEPS project. The net effect is significant uncertainty for business and increased double taxation risks.
We also remain concerned about the broader implications of today’s announcement. The taxation of diverted profits is an integral part of the OECD’s ongoing work on base erosion and profit shifting (BEPS). There is a real risk that unilateral measures of this kind will undermine a process that was intended to foster internationally consistent rules.
We’ve seen a number of other governments put forward measures recently that cut-across the BEPS project. The net effect is significant uncertainty for business and increased double taxation risks. There is a real concern within the international business community that this will trigger a raft of tax disputes that the international system is not at all equipped to deal with.”
On country-by-country reporting requirements, Donia Hammami, Policy Manager of the ICC Commission on Taxation, said: “The introduction of country-by-country reporting can provide an important risk assessment tool for tax authorities going forward. In line with existing G20 commitments, it’s vital that information shared with tax authorities under this regime remains confidential.
Making data publically available may seem superficially attractive, but will inevitably provide an incomplete picture of the tax footprint and economic contribution of cross-border businesses. There is also a risk that it would lead to the disclosure of commercially sensitive information-and in some circumstances may place companies in breach of local laws.”
ICC is fully engaged in the OECD BEPS project and works closely with the UN and G20.
Learn more about the ICC Commission on Taxation.