23 September 2015

  |  CBI Updates Team


Building trust in the international tax system

This is the second paper in the CBI’s Comprehensive Business Tax Roadmap series, setting out our recommendations for Government’s policy priorities for international tax in the current Parliament. 

Building trust in the international tax system

It comes ahead of the Government’s commitment to publish a Business Tax Roadmap by April 2016 and the G20/OECD Base Erosion and Profit Shifting (BEPS) project recommendations due early October.

Read the “Building trust in the international tax system” paper here

The BEPS project has been a unique exercise, providing an opportunity to update international tax rules to ensure companies pay tax where the profits are earned. It is important that all stakeholders, including governments, tax authorities, civil society and corporate tax payers have trust that the outcome will deliver a fair system. For the UK, a system that reduces both tax avoidance and double taxation whilst maintaining the UK’s competitiveness is vital to attract investment, create jobs and drive sustainable growth and public finances.

In order to improve the trust of stakeholders whilst maintaining competitiveness, we recommend that the Government focuses on three key themes: 

  1. Build public trust in the international tax system: Like business, the UK Government has an important role to play to address the trust deficit that exists for the benefit of all stakeholders. This will need to include a clearly communicated and fairly implemented policy on tackling abusive tax arrangements. 
  2. Ensure that the UK remains as a territory of choice for internationally mobile business to locate here: It is important that the UK Government does not go beyond what is necessary to tackle BEPS and abusive tax arrangements as agreed by the G20. The UK tax system must signal the UK is open to business and inbound investment.
  3. Focus on a period of stability once the BEPS project outcomes are established and implemented by the Government: It is important that the BEPS project recommendations are allowed the chance to show its effectiveness, in particular regarding country-by-country reporting, transfer pricing and permanent establishments.