Foreign Companies: Taxation

HM Treasury written question – answered on 14th January 2015.

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Photo of Bob Stewart Bob Stewart Conservative, Beckenham

To ask Mr Chancellor of the Exchequer, if he will bring forward legislative proposals to introduce a sales tax on companies which operate in the UK and locate their headquarters overseas.

Photo of David Gauke David Gauke The Financial Secretary to the Treasury

Along with most major economies in the world, the UK has a territorial tax system that levies corporation tax on profits derived from economic activity carried out here – corporation tax is not levied on either sales or turnover.

While the Government always keeps the tax system under review, in this case it is not immediately obvious that introducing a sales tax would be a suitable approach as the tax would be likely to be passed on to consumers.

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