The UK Chancellor George Osborne’s ‘diverted profits’ tax is under attack by US multinationals, in the midst of claims that the move would impact inward investment.
Dubbed Google tax, the new tax is set to be introduced this April to deal with what is being described as multinationals that ‘go to extraordinary lengths’ to curb their tax bills.
According to the US lobby group of multinationals, the National Foreign Trade Council (NFTC), the measure had been ‘an election year proposal that could have long-term consequences for inward investment into the UK’.
The FT cited NFTC’s letter to Osborne as saying: "The new tax seems to go against the declaration of Prime Minister [David] Cameron that ‘the UK is open for business’.
According to the Treasury, these policies are aimed at ensuring multinationals pay their ‘fair share’ of tax while decreasing the corporate tax rate by 8 percentage points to 20%.
The Treasury added: "The government’s message has been consistent and clear: low taxes, but taxes that will be paid."