Pwc, Shire eyed for tax avoidance | Fin24

Pwc, Shire eyed for tax avoidance

Feb 06 2015 18:45

London - A panel of British lawmakers has accused drug maker Shire and accountancy firm PwC of extensive tax avoidance and urged the government to tighten regulation of corporate tax advisers to curb the practice.

The parliamentary Public Accounts Committee said on Friday that thousands of internal PwC 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 0.0156%.

The documents also showed that PwC had engaged in "the promotion of tax avoidance on an industrial scale", committee chair Margaret Hodge said in a statement.

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

A Shire spokesperson said that the pharmaceuticals company followed the tax rules in all jurisdictions in which it operates.

"We consider effective and lawful management of our tax affairs to be an appropriate and responsible part of our drive for efficiency and reinvestment into research," he said.

Though PwC said that it disagreed with the committee's conclusions, it added: "We recognise we need to do more to explain the positive role we play in the tax system."

The Committee called on the government to introduce regulations that would penalise big accountancy firms such as PwC if they help companies to set up complex international corporate webs purely to avoid tax.

"The tax industry has demonstrated very clearly that it cannot be trusted to regulate itself," the committee said in its report.

The "Lux-leaks" documents, as they have become known, also prompted calls in the European parliament for the resignations of EU Commission president and former Luxembourg Prime Minister Jean-Claude Juncker.

pwc  |  tax  |  financial services


Read Fin24’s Comments Policy publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Do you think government can solve the Eskom crisis?

Previous results · Suggest a vote