U.K. Takes Step That May Impact Tax Loophole Favored by Big Tech
- U.K. repealed exemptions on royalties and intra-group interest
- Tax treaties mean that there won’t be much immediate impact
Photographer: Chris Ratcliffe/Bloomberg
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A small provision buried in the budget, unveiled this week by U.K. Chancellor of the Exchequer Rishi Sunak, could eventually lead to larger tax bills for multinational technology firms.
Sunak’s plan repeals legislation that means companies based in European Union member states could stop benefiting from tax exemptions on intra-group interest and royalties payments. While the immediate impact is small, it potentially removes a barrier to future changes that could target tax haven payments utilized by big tech companies, experts say.