February 6, 2015 / 12:08 AM / 5 years ago

British lawmakers attack PwC and Shire over 'industrial scale' tax avoidance

LONDON (Reuters) - A panel of British lawmakers has accused drugmaker Shire SHP.L and accountancy firm PwC of extensive tax avoidance and urged the government to tighten regulation of corporate tax advisers to curb the practice.

A sign sits in front of Shire's manufacturing facility in Lexington, Massachusetts July 18, 2014. REUTERS/Brian Snyder

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 10 billion pounds of intra-company loans to shift profits to Luxembourg, where it paid tax at an effective rate of only 0.0156 percent.

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 (SBUX.O), Google (GOOGL.O) and Amazon (AMZN.O) over their tax affairs.

A Shire spokesman 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.

Editing by David Goodman

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below