Thursday 22 May 2008

Good news for IP taxation in the UK -- but is it too late?

In "Alistair Darling retreats from tax on offshore intellectual property", The Times Online, 19 May 2008, reported as follows:
"Alistair Darling [British Chancellor of the Exchequer] will signal another tax U-turn this week to prevent a threatened exodus from Britain of multinational companies.

... the Chancellor will sound the retreat over moves to tax intellectual property held offshore. The proposal was contained in a Treasury discussion paper on reforms to the way in which earnings from foreign subsidiaries are taxed. It led to a storm of protests from companies fearing that patents and brands held offshore were about to be brought within the reach of the British taxman.

Mr Darling is expected to offer an explicit assurance that the new regime will be revenue-neutral and will pose no specific threat to companies rich in intellectual property. A Treasury spokesman said that the final reform package would be unveiled late next month or in early July ...

Last month Jean-Pierre Garnier, the outgoing chief executive of GSK, who is a member of the Prime Minister’s International Business Advisory Council, issued a veiled warning to the Government over proposed changes to its tax regime.

Shire, Britain’s third-biggest pharmaceutical company, will incorporate its new holding company in Jersey and hold all board meetings in Dublin to limit its tax bills. ...".

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