News Article - 20 March 2008
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The government may be considering making changes to the tax system which would allow firms to earn profits on ventures abroad without incurring tax.

A report from the Financial Times highlights the forthcoming launch of a consultation document in the coming weeks which is expected to outline various options available to the government, Tax-News.com reports.

One of the options is reported as being a participation exemption for foreign dividends and a different approach to the rules which stipulate that taxes must be levied on profits earned abroad.

According to the website, the move would come as part of measures to improve the tax regime in relation to corporations amid warnings that the UK's competitiveness as a business centre is falling.

It would also follow the slashing of corporation tax by two per cent earlier this year by chancellor Gordon Brown.

While the move was welcomed by the majority of companies, smaller businesses expressed dismay at a rise in the amount of tax they have to pay to 22 per cent in 2009.

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