The Government has launched a consultation on how a worldwide 15 per cent minimum corporation tax can be implemented domestically, in a move designed to tackle avoidance and ensure a more level playing field for UK businesses.<\/p>\n
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More than 130 countries signed up to a new global minimum tax framework in October 2021, after the G7 group, under the UK\u2019s presidency, had earlier in the year agreed to the move in principle.<\/p>\n
Fairer distribution of profits<\/strong><\/p>\n The two-pillar package \u2013 the outcome of negotiations coordinated by the Organisation for Economic Co-operation and Development (OECD) for much of the last decade – aims to ensure that large Multinational Enterprises (MNEs) pay tax where they operate and earn profits, while adding much-needed certainty and stability to the international tax system.<\/p>\n Pillar One will ensure a fairer distribution of profits and taxing rights among countries concerning the largest MNEs, including digital companies.<\/p>\n It would re-allocate some taxing rights over MNEs from their home countries to the markets where they have business activities and earn profits, regardless of whether firms have a physical presence there.<\/p>\n Pillar Two seeks to put a floor on competition over corporate income tax, through the introduction of a global minimum corporate tax rate that countries can use to protect their tax bases.<\/p>\n Creating a move level playing field<\/strong><\/p>\n The Pillar 2 framework will ensure large multinational firms pay tax of at least 15 per cent on profits in each country in which they operate, creating a more level playing field and further cracking down on tax avoidance. It will be operated on a country-by-country basis.<\/p>\n With changes aimed to come into effect from 2023, the consultation will run for 12 weeks.<\/p>\n The consultation seeks views on the application of the global minimum corporation tax in the UK, as well as a series of wider implementation matters, including who the rules apply to, transition rules and how firms within scope should report and pay.<\/p>\n Historic agreement says Sunak<\/strong><\/p>\n Introducing the new consultation,\u00a0\u00a0Chancellor of the Exchequer Rishi Sunak said: \u201cEnsuring large multinational groups pay the right tax in the right place has been a long-standing priority for the UK.<\/p>\n \u201cWe reached an historic agreement last October following more than a decade of talks and negotiations, and this marks another important milestone on how this will work in practice.\u201d<\/p>\n For help and advice on related matters, contact our expert team today.<\/p>\n","protected":false},"excerpt":{"rendered":" The Government has launched a consultation on how a worldwide 15 per cent minimum corporation tax can be implemented domestically, in a move designed to tackle avoidance and ensure a more level playing field for UK businesses.<\/p>\n","protected":false},"author":1,"featured_media":2167,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11,17,15],"tags":[],"yoast_head":"\n