Accountancy firm says it plays a positive role
PwC accused of supporting tax avoidance on an “industrial scale”
While the practice is legal, MPs say the firm was encouraging hundreds of clients to cut their corporation tax bills by setting up bases in tax havens such as Luxembourg.
In some cases it meant large companies were paying tiny amounts of tax. Shire Pharmaceuticals shifted profits to Luxembourg where it paid tax at 0.0156% whereas the UK corporation tax rate is 21%.
Shire said it always complied with tax obligations in the jurisdictions in which it operates, but the so-called Lux-Leaks documents that led to revelations of tax avoidance have prompted calls for a tightening of regulations.
Corporate tax avoidance has become a major issue with fingers pointed particularly at big US companies such as Amazon, Google and Starbucks. PwC said it disagreed with the Public Accounts Committee report but added that the tax system was “too complex”.
It added: “We recognise we need to do more to explain the positive role we play in the tax system and in helping businesses to operate successfully.”
Margaret Hodge, chairwoman of the Public Accounts Committee at Westminster, said: “We believe that PricewaterhouseCoopers’s activities represent nothing short of the promotion of tax avoidance on an industrial scale.”