PAC grills PwC on role in "industrial scale" tax avoidance
PwC was accused of ‘selling tax avoidance schemes on an industrial scale’ at a meeting of the Public Accounts Committee (PAC) convened to examine the so-called ‘Lux leaks’ as part of a follow-up on its inquiry last year into large accountancy firms and tax avoidance say Harris & Co accountants Northampton #accountants Northampton
Kevin Nicholson, PwC’s head of tax, faced a barrage of hostile questions during the two-hour session over the firm’s advice to multinationals on the choice of Luxembourg for establishing financing operations.
PAC chair Margaret Hodge claimed Nicholson’s original evidence to the committee’s inquiry in January 2013 was ‘a lie’, because his statements that PwC did not mass market tax products and was not in the business of selling schemes had been disproved by the discovery of 548 documents on PwC letterhead to 343 companies about making arrangements to take advantage of the low tax environment in Luxembourg.
Hodge and other committee members alleged that the advice given by PwC to these clients had identical features, involving the multinationals in setting up subsidiaries in Luxembourg as a way of making a series of ‘artificial’ intra-group loans, the interest payments on which were then used to offset profits in other jurisdictions and reduce or eliminate any corporation tax due.