Reform of CFCs' tax treatment mooted

The Treasury today published a discussion document on plans for reforming the UK tax treatment of controlled foreign companies (CFCs).

Ministers expect the proposals to enhance the country’s competitiveness, while providing adequate protection of the UK tax base. The new paper sets out the overarching framework of the mooted rules and the strategy for treating monetary assets and intellectual property.  

This latest measure is the second government reform of a foreign profits package. The first part was introduced in Finance Act 2009 and included an exemption for foreign dividends and an interest restriction measure.

The financial secretary to the Treasury, Stephen Timms, remarked, ‘Modernising these rules is crucially important to maintaining and enhancing the UK’s attractiveness as a base for global business.

‘This report, drawing on our discussions with businesses, is a key step in designing a system that better recognises the way multinationals operate today, while protecting our tax base,' said Mr Timms.

Issue: 4241 / Categories: News , CFCs , Companies