Governments must address need to restore public trust in tax, adviser says

Governments considering how multinationals should be taxed must address the erosion of public trust in tax administrations, while businesses continue to stress the importance of certainty in tax matters, panellists told a conference hosted by the Women in Tax network at Pinsent Masons’s London office November 20. Alexandra Readhead, an international tax and extractive industries consultant, said multinationals should be taxed “in a way that creates resources for public trust.”

Lizzie Arnold, a senior policy adviser at HM Treasury, outlined the UK government’s perspective on the taxation of multinationals. She described three aims, the first of which is to create a competitive corporate tax system … Giorgia Maffini, senior tax economist at the OECD, noted that residence and source are the two principles that define how multinationals are taxed. “We are trying to understand whether it’s time to think of another principle,” she said … Corporations are looking for “a bedrock of certainty” to provide stability, said Anna Elphick, vice president of tax for Asia and Africa at Unilever. Read more:

My news story for Tax Analysts, November 22 (paywall)

Tax specialists advocate cautious response to Paradise Papers

More could be done to tackle tax avoidance and evasion, but it is important not to tar all offshore activity with the same brush in the wake of the Paradise Papers, UK tax professionals suggested. One expert said simplification could reduce opportunities for those who seek to abuse the system.

As UK lawmakers and campaigners stepped up demands for greater transparency, Jonathan Riley, head of tax at Grant Thornton UK LLP, told Tax Analysts that the controversy “may represent the last chance for the tax profession to show it takes evidence of artificial tax avoidance seriously and will not promote it.” Riley noted that advisers are subject to many disclosure and compliance rules but tax is “still largely self-regulated.” It will be interesting to see whether the tax and accountancy bodies’ code on Professional Conduct in Relation to Taxation, updated with effect from March, is invoked in any cases featured in the Paradise Papers, he said. Read more:

My news story for Tax Analysts, November 17 ($)

UK campaign group urges greater international cooperation on corporate taxes

While the UK government continued to defend reductions in the corporate tax rate, a new campaign group called on ministers to champion the role of tax in building a civilised and fair society and to stop trying to compete for investment through “tax cuts and giveaways.”

Tax Justice UK aims to fill a “void in the debate around tax” in the UK. The November 22 budget should include steps toward “taxing the new economy” and resourcing and refocusing HM Revenue & Customs, it said in an October 25 release. The group was launched in May as a sister organisation to the Tax Justice Network but is independent of it, according to its website. Read more:

My news story for Tax Analysts, October 26 (paywall)

FTSE 100 company defends tax policy and backs multilateral push for public country-by-country reporting

A FTSE 100 company has strongly denied engaging in tax avoidance, and has offered cautious support for steps toward the multilateral introduction of mandatory public country-by-country reporting of multinationals’ profits and taxes.

Responding to a report by Oxfam International, Reckitt Benckiser Group PLC (RB), a manufacturer of health, hygiene, and home products, said in a July 12 statement that it pays the correct amount of tax in each country where it does business: “As Oxfam recognises, RB’s tax policy is totally legal and the norm for the majority of global businesses. We comply with all our legal obligations and seek to do what is right by all the company’s stakeholders.” Continue reading

Tax experts ‘shaped’ transparency debate, campaigners told

Business tax experts’ dominant role in consultations on measures to counter base erosion and profit shifting shaped a key debate on tax transparency, raising questions about inclusiveness and the formulation of policy, according to research presented to the Tax Justice Network.

Professionals played a central role in shaping the BEPS policy environment and process, according to a draft research paper presented by Rasmus Christensen, PhD fellow at Copenhagen Business School, at the Tax Justice Network’s annual conference in London July 5.

Christensen concluded that, operating within a technical policy environment “far removed” from high-level politics, “professionals seeking to make their mark on new standards for corporate tax transparency mobilised expertise and network capital, shaping what could be discussed, the criteria for accepted arguments, and who was listened to in the policy process, thus critically affecting the final policy outcomes.” His investigation is part of the Horizon 2020 program COFFERS, an EU-funded collaboration of universities and civil society organisations. Read more:

My news story for Tax Analysts, July 7 (paywall)

Rasmus Christensen’s draft paper: Professional Competition in Global Tax Reform: Transparency in Global Wealth Chains

Women in Tax set tone for better UK policy decisions

The Brexit vote has presented U.K. lawmakers with a “once in a generation” opportunity to improve the tax system, a leading tax expert told participants at a debate held by the Women in Tax network in London two days before Donald Trump’s election victory added further uncertainty to the tax landscape.

Panellists shared their personal views on how a better tax system can be achieved. U.K. tax policy measures often have very vague goals, said Jill Rutter, program director for the Institute for Government think tank.

Read more: My news story for Tax Analysts, 10 November (paywall).

Tax professionals call on U.K. government to help dispel avoidance ‘myths’

HM Revenue & Customs and politicians could do more to educate the public about tax and dispel “misleading impressions” about tax avoidance given by media reports, the Chartered Institute of Taxation has told the All Party Parliamentary Group on Responsible Tax.

The idea that there is a large “pot of gold” that could have reduced the need for austerity measures is a myth, the CIOT said, adding that “the concept that HMRC has failed to raid this non-existent pot is a fundamental misreading of reality.”

An APPG consultation was launched in September to consider HMRC’s ability to fight tax avoidance and evasion …

Read more: My news story for Tax Analysts, 26 October (paywall).