Corporate tax and the digital economy: position paper

Comments from ACCA to HM Treasury on 'Corporate tax and the digital economy: position paper' - A position paper issued by HM Treasury.

ACCA welcomes the opportunity to comment on the position page on corporate tax and the digital economy as issued by HM Treasury. 

The UK government's position, that in principle a multinational group's profits should be taxed in the countries in which it generates value, appears uncontroversial.

However there is a fine but important distinction between that principle and the practice of what currently happens. A multinational group's profits are taxed in those companies in which they are accounted for, subject to limited adjustment (including cross-border transfer pricing adjustments) for tax purposes. Reconciling the general policy statement with existing reporting and assessment tools in a fashion which would not create significant uncertainty for business would be a significant accounting and legal drafting challenge.

Our detailed comments can be found in the attached document.