New rules for multinationals

Budget and You
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The Independent Online
Tax rules for multinationals will be changed and modernised in the next Budget. The aim of these changes is to make the tax provisions more effective, to allow them to be applied more fairly, and to protect UK tax revenue.

Under the new rules, taxpayers will now be required to apply the arms'- length basis for transfer prices in calculating taxable profits in tax returns. And UK companies will be required to include amounts chargeable under the controlled foreign company rules in their tax returns.

The Government said that these changes would strengthen current legislation and bring it into line with modern practice in other major countries. The changes will also contribute towards the drive against tax avoidance.

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