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CFCs reform ‘moving in the right direction’, says PwC survey

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Corporate tax reforms need to strike the right balance between revenue protection and competitiveness, PwC said ahead of the release – which the firms expects to see this week – of a discussion document on corporate tax and controlled foreign companies reform.

A PwC survey of over 60 leading UK businesses suggested that CFC reform and foreign branch taxation reform are moving in the right direction, but ‘scepticism remains as to the likelihood of the Government delivering on its promise of the UK becoming the most competitive corporate tax regime in the G20’.

While 77% of businesses surveyed expressed satisfaction with the general direction of the proposed CFC reform, 82% did not expect that the Chancellor’s promise to make the UK the most competitive tax regime in the G20 would be met, the firm said.

‘The challenge is whether the right balance between reform that protects revenues and reform that assists the competitiveness of the UK’s corporate tax regime can be achieved,’ it added.

Andrew Boucher, Tax Partner at PwC, said the taxation of foreign profits discussion was now reaching ‘a critical point’ with businesses eager to see some kind of outcome.

‘While debate and consultation is important, given that UK plc is firmly in the driving seat when it comes to leading the rebuilding the UK’s economy there needs to be some action in delivering a corporate tax regime that allows UK multinational corporations to compete with their international peers,’ he said.