{"id":26906,"date":"2014-12-03T15:26:29","date_gmt":"2014-12-03T15:26:29","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=26906"},"modified":"2014-12-03T15:26:29","modified_gmt":"2014-12-03T15:26:29","slug":"the-diverted-profits-tax-is-it-the-start-of-unitary-taxation","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2014\/12\/03\/the-diverted-profits-tax-is-it-the-start-of-unitary-taxation\/","title":{"rendered":"The diverted profits tax &#8211; is it the start of unitary taxation?"},"content":{"rendered":"<p>A diverted profits tax has been announced today, <a title=\"Is the diverted profits tax going to be based on country-by-country reporting data?\" href=\"http:\/\/www.taxresearch.org.uk\/Blog\/2014\/12\/03\/id-love-to-tell-you-how-the-diverted-profit-tax-will-work\/\">to which I have already referred<\/a>. I gather we will learn no more about it until next week, so I am left speculating on how it might work.<\/p>\n<p>What we know is that this will raise more than \u00a3250 million in 2015 and over \u00a3300 million a year after that. That's significant. It means more than a billion of profits will be brought within the scope of this new 25% tax charge - and there is no clue given why that rate is being used.<\/p>\n<p>So how will the Revenue prove profit diversion. The obvious example is Google which in 2013 said it had worldwide profits of just less than $14.5 billion and made 10% of its sales in the UK and yet paid almost no corporation tax here. Will HMRC do a simple apportionment and say 10% of those profits should be here then? If so Google could be asked to pay tax of maybe \u00a3200 million in the UK as a result. That would meet most of the budget for the new tax by itself.<\/p>\n<p>But to do this would be revolutionary. It would mean that the UK was introducing a unitary apportionment tax of the type I have long argued for and which has always been rejected by the UK and also the OECD.<\/p>\n<p>If it is not this, then what is it? I rather hope we will see tax on a unitary basis using\u00a0country-by-country reporting as the basis of calculation, because this would be the start of a revolution in UK and worldwide corporate taxation. Bt does this Chancellor really have the willing to do that?<\/p>\n<p>We'll have to wait and see.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A diverted profits tax has been announced today, to which I have already referred. I gather we will learn no more about it until next<br \/><a class=\"moretag\" href=\"https:\/\/www.taxresearch.org.uk\/Blog\/2014\/12\/03\/the-diverted-profits-tax-is-it-the-start-of-unitary-taxation\/\"><em> Read the full article&#8230;<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[64,79],"tags":[],"class_list":["post-26906","post","type-post","status-publish","format-standard","hentry","category-corporation-tax","category-country-by-country"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/26906","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=26906"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/26906\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=26906"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=26906"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=26906"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}