Most of the changes that affect international corporate taxation have been announced previously and are part of the move towards a ‘more territorial’ tax system. FA 2011 will complete the interim CFC reform as a precursor to more fundamental reform in FA 2012. For those with branches abroad the exemption of foreign branch profits (to place them on a level playing field with those who benefit from dividend exemption) will be enacted this year. The branch exemption will be optional and the measure of the exempted profits will either reflect the relevant tax treaty or the OECD Model (which presumably means applying the authorised OECD approach to profit attribution even for states that would never accept that approach). The TIIN indicates that around 150 multinationals will benefit mostly in the financial sector; some life assurance companies will be able to benefit too.
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