Taxation: International Companies

Debate between Lord Avebury and Lord Sassoon

Tuesday 23rd October 2012 Lords Chamber

[Lord Sassoon]

My Lords, the noble Lord does not expect me for one moment to start commenting on the tax affairs of any individual taxpayer. As a general response, it may interest the House that the 800 or so largest companies that come under the large business service of HMRC to be assessed pay £136 billion in corporation tax, PAYE and VAT each year. Almost 50% of that tax comes from foreign-owned businesses, so I do not think we should have in mind that foreign-owned companies as a group are somehow doing something that we have to be vigilant about. We must keep this in proportion.

[Lord Avebury]

My Lords, do the OECD rules apply to internet-based companies, such as Amazon, and when will they come into effect?

[Lord Sassoon]

My Lords, a series of measures has been agreed internationally through the OECD over many years. The fiscal affairs committee of the OECD is having a new look at this, and this work was endorsed by the G20 at the Los Cabos meeting in June, to get those rules into a fit state for the 21st century. They are the rules that govern the relationships between countries and the base on which all companies should operate their tax regimes, but they need to be modernised.