translate arrow

Strike Aviation Group

Strike Aviation Group


Ai Logistics Network


LONDON: A report from the UK Parliament's House of Commons Committee of Public Accounts says corporate advice from PricewaterhouseCoopers (PwC) based on diverting profits to the Grand Duchy of Luxembourg, is characteristic of a mass-marketed tax avoidance scheme.

According to the International Consortium of Investigative Journalists (ICIJ), PwC helped multinational companies obtain at least 548 tax rulings in Luxembourg from 2002 to 2010. In files released in December last year the ICIJ showed that Hutchison Whampoa, whose subsidiary Hutchison Port Holdings is a global port operator, was one of them.

kevin-nicholson-pwcHouse of Commons committee chair Labour Party MP Margaret Hodge commented: "We consider the evidence that PwC provided to us in January 2013 was misleading, in particular its assertions that 'we are not in the business of selling schemes' and 'we do not mass-market tax products, we do not produce tax products, we do not promote tax products.'"

Based on evidence from Kevin Nicholson (right), head of Tax, PricewaterhouseCoopers LLP, and Fearghas Carruthers, head of Tax, Shire Pharmaceuticals, the latest report says the pharmaceutical company has enabled interest payments on intra-company loans to reduce significantly its overall tax liabilities: While Shire has external borrowings of around £800 million, it makes interest payments on intra-company loans worth $10 billion to a company it has established in the Grand Duchy.

The committee says the net effect is to shift profits from countries with higher tax rates to Luxembourg where Shire employs just two people out of a global total of 5,600. Noting that Shire paid tax of only 0.0156 percent on its profits in Luxembourg, the report says neither PwC nor Shire could demonstrate that the company's presence in the country was designed to do anything other than avoid tax.

"We believe that PricewaterhouseCoopers's activities represent nothing short of the promotion of tax avoidance on an industrial scale," said Hodge, who added: "The fact that PwC's promotion of these schemes is permitted by its own code of conduct is clear evidence that government needs to take a more active role in regulating the tax industry, as it evidently cannot be trusted to regulate itself."


CSAFE Global


- powered by Quickchilli.com -