Controlled foreign companies reforms
HM Treasury together with HM Revenue & Customs have issued a discussion document which proposes a number of reforms to the UK tax treatment of controlled foreign companies (CFCs). The proposals are intended to increase the UK’s global competitiveness whilst at the same time protecting UK tax revenues.
The key objectives of the new rules are:
- To protect against artificial diversion of profits from the UK
- Not to tax profits genuinely earned overseas
- To reflect modern business practices
- To be compliant with EU law
- The treatment of monetary assets
- Reforms to intellectual property
The consultation period for the document closes on 20 April 2010. Any responses or enquiries should be sent to:
Jennifer Payne or Hannah Mitchell
1 Horse Guards Road
London, SW1A 2HQ
It is expected that more detailed document along with draft legislation will be published later in 2010 with legislation being introduced in the 2011 Finance Bill.