Saturday 23 September 2017

UK committee attacks Shire and PwC over alleged corporate tax avoidance

Shire's headquarters in Dublin. Photo: Aidan Crawley/Bloomberg
Shire's headquarters in Dublin. Photo: Aidan Crawley/Bloomberg

Tom Bergin and Colm Kelpie

A panel of British politicians has accused pharmaceutical company Shire - which has operations in Ireland - and accountancy giant PwC of extensive tax avoidance.

The UK parliament's Public Accounts Committee (PAC) said yesterday that thousands of PwC internal documents, released by a consortium of international journalists last year, showed that Shire had used £10bn of intra-company loans to shift profits to Luxembourg, where it paid tax at an effective rate of only 0.0156pc.

Shire is registered in Jersey but lists Dublin as its correspondence address.

Corporate tax avoidance has risen to the top of the political agenda in Britain, in part thanks to PAC's grilling of executives at companies including Starbucks, Google and Amazon over their tax affairs.

The PAC chief, Labour MP Margaret Hodge, has in the past been critical of the amount of corporation tax paid in the UK by multinationals such as Google, which has its European headquarters in Dublin.

Ms Hodge said her committee believed PwC's testimony in January 2013, in which it stated that it wasn't in the business of selling schemes, and neither mass-marketed, produced nor promoted tax products, was "misleading".

"This is the second time we have had cause to examine the role of large accountancy firms in advising multinational companies on complex strategies and contrived structures" to avoid tax, Ms Hodge said.

"Contrary to its denials, the tax arrangements PwC promotes ... bear all the characteristics of a mass-marketed tax avoidance scheme."

PwC rejected Hodge's claims it had misled politicians about its activities, though it agreed the tax system was "too complex" and said it would continue to support its reform.

A Shire spokesman said the pharmaceuticals company followed the tax rules in all jurisdictions in which it operates. (Additional reporting Reuters)

Irish Independent

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