UK report accuses PwC of tax avoidance on industrial scale

[unhappycamper]

http://hosted.ap.org/dynamic/stories/E/EU_BRITAIN_TAX?SITE=VANOV&SECTION=BUSINESS&TEMPLATE=DEFAULT

UK report accuses PwC of tax avoidance on industrial scale
By DANICA KIRKA
Associated Press
Feb 6, 9:53 AM EST

LONDON (AP) -- A British parliamentary committee on Friday accused the accounting firm PwC of promoting tax avoidance on an industrial scale and urged the government to step in and do more to regulate the tax industry.

The Public Accounts Committee issued a scathing report, accusing PwC of mass-marketing tax avoidance plans and diverting profits to Luxembourg through intra-company loans.

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The U.K. committee cited the example of Shire Pharmaceuticals, saying the company arranged to have its interest payments on intra-company loans significantly reduce its overall tax liabilities. Although the company borrowed 800 million pounds ($1.2 billion) externally, it had made interest payments on intra-company loans worth $10 billion to a company it established in Luxembourg.

"The effect is to shift profits from other countries, where tax rates are higher, to Luxembourg," the committee said. "The `substance' of Shire's business in Luxembourg, used to justify these arrangements, consists of two people out of the 5,600 staff the company employs globally."

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http://en.wikipedia.org/wiki/Pwc

icewaterhouseCoopers (trading as PwC) is a multinational professional services network. It is the world's second largest professional services network, as measured by 2014 revenues, and is one of the Big Four auditors, along with Deloitte, EY and KPMG.

PwC is a network of firms in 157 countries with more than 195,400 people. It had total revenues of $34.0 billion in FY 2014, of which $15.1 billion was generated by its Assurance practice, $8.8 billion by its Tax practice and $10.0 billion by its Advisory practice.[5]

The firm was formed in 1998 by a merger between Coopers & Lybrand and Price Waterhouse.[1] The trading name was shortened to PwC in September 2010 as part of a rebranding.[6]

As of 2014 PwC United States is the 5th-largest privately owned organization in the United States.[7]

Tax Avoidance



One of the tax rulings of Luxembourg Leaks negotiated by PwC

548 tax arrangements relating to 343 multinational corporations and Luxembourg which were negotiated by PwC became public in 2014 in the so-called Luxembourg Leaks.[42][43]

PwC received $55m from Caterpillar Inc. to develop a tax avoidance scheme, according to an investigation of the senate. $8bn in profits were shifted from the US to Switzerland which allegedly made it possible to save more than $2.4bn in US taxes over a decade. In Switzerland profits were taxed at 4%.[44] A PricewaterhouseCoopers partner who was involved in designing the tax savings plan commented: “We'll all be retired when this . . . comes up on audit.”[45]