Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what steps the Government is taking to ensure that UK corporate tax rules do not incentivise companies to avoid tax in developing countries.

The Government is committed to making sure multinational enterprises pay their share of tax. The UK has been at the forefront of multilateral action through the G20 and the Organisation for Economic Co-operation and Development (OECD) to reform the international tax rules.

We used our Presidency of the G8 in 2013 to successfully initiate the G20-OECD Base Erosion and Profit Shifting (BEPS) project. The final recommendations were published by the OECD in October 2015, and endorsed by the G20 leaders in November 2015.

The BEPS project represents major and unprecedented efforts. The international project involved over 60 countries, including developing countries, to work together on an equal footing to better align the taxation of profits with economic activity and value creation.

The UK has been a leader on implementing the BEPS outputs – we have adopted the OECD country-by-country reporting template; and, at Budget 2016, the UK announced that it would be the first country to act on the OECD recommended rules on interest deductibility.

The UK will continue to participate in international efforts to address BEPS by participating in the OECD’s inclusive framework to monitor implementation, which also involves developing countries, and in work to develop toolkits to assist developing countries implementing the BEPS outcomes.