The Chartered Institute of Taxation (CIOT) has welcomed the draft legislation to implement a global minimum rate of tax for large multinational companies published for consultation this week.
John Cullinane, CIOT Director of Public Policy, commented: “The global agreement on a minimum rate of corporation tax is historic but making it happen is complicated. The legislation published today for a new ‘Multinational Top-up Tax’ is long and complex and the new rules will pose big administrative and compliance challenges for tax authorities and affected businesses alike.
“It is important countries move forward together in this area. The Government’s priority should be to make sure that there is an effective implementation of the minimum global corporation tax rules, in detail as well as in principle, so that the end result is a multilateral set of interlocking rules that faithfully deliver the policy aims. It is not sensible to go through the motions of doing something in the UK quickly which will not deliver those aims.
“For this reason we welcome the Government’s decision to implement the reform at the end of 2023 rather than, as previously suggested, next April. We also welcome the publication of the draft legislation for consultation at this stage, notwithstanding the recognition that there are many areas that require further multilateral work through the OECD ‘Implementation Framework’. This affords an opportunity for early scrutiny.
“It is more important to do this right and to do it together than it is to do it quickly.”