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NEWS May 11 2001
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| Cock-ups and hand-outs The British public may be forced to refund up to £5bn of tax to overseas corporations including AstraZeneca, Monsanto, Siemens, Total Oil and Deutsche Bank in the light of an EU ruling on corporation tax. More than forty companies are filing lawsuits to claim millions back from Advance Corporation Tax (ACT) paid in the 1990s. At the time, the law was such that UK companies with parent companies abroad had to pay ACT whereas companies with parents in the UK could get an exemption. Several companies challenged the system in the European Court of Justice and, in March this year, achieved a ruling that the system infringed the ‘right’ of foreign corporations to equal treatment with UK-based ones. As a result, the lawsuits are now flooding in, with companies claiming backdated refunds. The amounts involved – £34 million for Deutsche bank, £70 million for Total Oil etc. – are tiny in the corporations’ terms, but added together may come to £5bn or more – money which will no doubt be cut from public services if it has to be paid. The Treasury is reported to be pinning its hopes on a High Court judgement later this year, which could limit which companies can claim refunds and how far they should be backdated. Once again, however, the notional right of corporations to make money has been privileged over the increasingly ignored moral obligation on governments to provide services for their citizens. |