Ambassador warns on US tax proposal

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The Independent Online
THE BRITISH ambassador to the United States has taken the unusual step of complaining to Washington about a foreign tax bill to be introduced today in the US House of Representatives, writes Larry Black in New York.

The bill would require multinational corporations to pay a minimum tax to the US, regardless of whether they are profitable. It would also empower the Internal Revenue Service to determine fair prices for intra-corporate transactions within global firms.

In a letter last month to Nicholas Brady, the American Treasury Secretary, the ambassador, Sir Robin Renwick, complained of the potential for double taxation under such a law and warned of possible 'retaliatory measures'.

'It could do great damage to the two-way flow of investment between our countries,' Sir Robin is quoted as saying. Excerpts from the letter appeared in US newspapers yesterday, but the embassy would only confirm its existence and reiterate its main points.