Will Bringing Sales Onshore in the U.K. Lead to Higher Taxes?

Jeffery M. Kadet and Tommaso Faccio, “Will Bringing Sales Onshore in the U.K. Lead to Higher Taxes?”, 82 Tax Notes Int'l 679 (May 16, 2016)

8 Pages Posted: 6 Jun 2016

See all articles by Tommaso Faccio

Tommaso Faccio

Nottingham University Business School

Jeffery M. Kadet

University of Washington - School of Law

Date Written: May 16, 2016

Abstract

The authors discuss changes to the scope of the U.K. royalty withholding tax announced in the 2016 U.K. budget, which, along with the new diverted profits tax, could cause significant increases in U.K. tax paid by multinationals. As will be seen from the example set out in the article, the U.K. royalty withholding tax announced in the 2016 U.K. budget is a major portion of this increase. This will have a major impact on the economics of profit-shifting structures involving revenues that require on-the-ground sales, marketing, and other support activities in the U.K. The U.K.’s actions should be closely examined and may well be followed by numerous other countries feeling the effects of aggressive profit-shifting structures.

Keywords: United Kingdom, U.K., DPT, Diverted Profits Tax, Royalty Withholding Tax

JEL Classification: H21, H25, K34, E62

Suggested Citation

Faccio, Tommaso and Kadet, Jeffery M., Will Bringing Sales Onshore in the U.K. Lead to Higher Taxes? (May 16, 2016). Jeffery M. Kadet and Tommaso Faccio, “Will Bringing Sales Onshore in the U.K. Lead to Higher Taxes?”, 82 Tax Notes Int'l 679 (May 16, 2016), Available at SSRN: https://ssrn.com/abstract=2789833

Tommaso Faccio

Nottingham University Business School

Jubilee Campus
Wollaton Road
Nottingham, NG8 1BB
United Kingdom

Jeffery M. Kadet (Contact Author)

University of Washington - School of Law ( email )

William H. Gates Hall
Box 353020
Seattle, WA 98105-3020
United States

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