By Claire West
'Corporate Tax Reform: delivering a more competitive system', includes proposals for reform of rules on 'controlled foreign companies' (CFCs).
Vincent Oratore, President of the CIOT, said:
"The CIOT and others in the tax world have said for a long time that the corporate tax system needs serious reform and modernisation to be internationally competitive. It is good to see that the Government agree and that reform is going ahead with a sense of urgency.[/i[
[i]"It is good too, to see that the Government's approach on corporate taxes is consistent with the approach they have promised on tax policy-making, including a road-map setting out their strategy in this area for the whole Parliament. This will make the system more predictable and help businesses plan for the future.
"This is particularly important in the current economic climate, with the Government relying on private sector expansion to keep the economy growing."
Adrian Rudd, Chairman of the CIOT's Corporate Tax Sub-Committee, said:
"We welcome the reform of CFC rules which have become more and more complex to operate since their introduction in the 1980s. CFCs remain a major administrative burden on multinational corporations, often to no real impact so far as tax yield is concerned.
"It is encouraging that a timetable to legislate in Finance Act 2012 has been published in today's consultation document. This ought to allow sufficient time for proper consultation.
"Obviously the very large businesses are vital to the UK economy and pay a significant proportion of the corporate tax yield, but Government should remember smaller firms too.
"The objectives for the reformed CFC framework must be greater certainty, lower compliance costs and a more competitive business environment."