Tax arrangements that PwC promoted in Luxembourg, revealed through the “Lux Leaks” scandal, bear all the hallmarks of a mass-marketed tax avoidance scheme, according to a UK Public Accounts Committee report published February 6.
The conclusion did not come as a surprise, as MPs during a December 8 PAC hearing confronted PwC’s Kevin Nicholson with the same charge — claiming the Lux Leaks disclosures were evidence that his firm was “selling tax avoidance on an industrial scale.”
The Lux Leak documents — confidential PwC client documents, including 548 Luxembourg advance rulings and corporate tax returns of Luxembourg-based subsidiaries of MNEs — were leaked and published on the internet on November 5 by the International Consortium of Investigative Journalists.
Nicholson had argued at the PAC hearing that his firm does not sell “schemes” but provides “bespoke” advice to clients, including to firms operating in Luxembourg.
According to the PAC report, though, “the number of cases involved plainly demonstrates that PwC is effectively selling variations on a scheme to a large number of its clients.”
“HMRC should set out how it plans to take a more active role in challenging the advice being given by accountancy firms to their multinational clients, with a particular view to the mass marketing of schemes designed to avoid tax,” the report advised.
Further, the government should introduce a code of conduct for tax advisers, and consult on how to regulate the industry and the code.
HMRC should also push for a more rigorous and meaningful definition of what substance means in discussions with the OECD, the report concluded.
See:
Related MNE Tax articles:
Be the first to comment