UK Targets Corporate Profits of Multinational Enterprises With Sweeping Tax Changes

    View Authors 3 December 2014

    On December 3, the UK Government announced its intention to introduce a new “diverted profits tax” (DPT) to take effect on April 1, 2015. Draft legislation was published on December 10 and is now subject to a public consultation process until February 4, 2015.

    The aim is to “counteract contrived arrangements used by large groups (typically multinational enterprises) that result in the erosion of the UK tax base.” The new tax, frequently referred to as the “Google tax,” has the potential to significantly increase tax costs for multinational enterprises operating in the UK.