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To ask Her Majesty’s Government, further to the answer by Baroness Neville-Rolfe on 18 January (HL Deb, col 212), and in the light of paragraph 17(7) of Schedule 19 to the Finance Act 2016 which provides for the Treasury to make regulations requiring group tax strategies to include a country-by-country report, what steps they are taking to ensure that transnational companies are fully transparent about the real centres of their economic activity and reveal any misalignment between that and where such companies declare their profits for tax purposes in their annual accounts.
The Government believes that profits should be taxed where economic activities are performed. The UK has introduced the OECD model of country-by-country reporting. This will provide a clear overall picture of the global position on profit and tax of multinational groups to tax authorities, enabling them to make more informed assessments of where risks lie.
The Government has set out its objective for a comprehensive and effective model of public country-by-country reporting that is agreed on a multilateral basis, to improve transparency over businesses’ tax affairs and build public trust in the tax system. The UK will continue to work with international partners with a view to delivering on that objective. This includes our continued participation in the discussions on the European Commission’s proposal.