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9am Lowdown

9am Lowdown: McDonald's brings non-US tax base to UK

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9th Dec 2016
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Good morning and welcome to Friday's Lowdown. Here's the news. 

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McDonald's brings non-US tax base to UK

McDonald’s is to move its non-US corporate HQ out of Luxembourg and flow its European income through the UK instead.

According to the Guardian, this move comes 12 months after the EU competition launched an inquiry into McDonald’s Luxembourg tax arrangements.

A McDonald’s spokesman denied that this move was to obtain a better corporate tax rate: “The change will result in the creation of a unified structure located in the UK with responsibility for the majority of royalties received ... outside the US.”

Meanwhile, fair tax campaigner Richard Murphy said on his blog that it appears as if Luxembourg is in “tax haven decline”. Murphy also suspects that this deal could be Brexit influenced. “[B]eing outside the EU soon will not be a commercial deterrent and may be a tax advantage. The U.K. is saying it will guarantee low tax rates. And the EU Competition Commissioner will not be able to interfere anymore.”

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Workers abroad pose tax challenges for businesses

The rise in the number of employees working abroad poses tax challenges for business, PwC warns.

According to PwC’s global survey, 31% of businesses don’t know where in the world their people are working and what they are doing, and 23% do not know who holds responsibility for business travellers. 58% recognise the importance of BEPs recommendations for mobility but are unsure how to deal with the challenges.

Ben Wilkins, global mobility partner at PwC, said: “Global work is increasing sharply and as people move in more fluid and informal ways, it creates complex mobility challenges for their employers. Companies must develop an understanding of who their mobile people are, where they are going and what they are doing, to be best placed to identify the risks.

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Sportech wins VAT repayment case

Sportech will keep a £97m VAT repayment over its spot the ball game after the Supreme Court upheld the court of appeal decision, eight years after Sportech launched its claim.

According to The Times, the case questioned whether spot the ball is a game of chance or skill. The football pools owner claimed it was chance so shouldn’t haven been subject to VAT during the 17 year period between 1979 and 1996.

Sportech chief executive Ian Penrose told the Liverpool ECHO: “It’s been going on for eight years and we’re clearly pleased with this decision. The case is finally over and for the company it’s clearly a significant event. It dramatically changes our financial position.”

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