HC Deb 14 February 1957 vol 564 cc1424-6
21. Mr. Peyton

asked the Chancellor of the Exchequer how the level of company taxation in the United Kingdom compares with that in force in those European countries which support the proposals for a Common Market.

Mr. Birch

As the answer contains a number of figures, I will, with permission, circulate it in the OFFICIAL REPORT.

Mr. Peyton

Whilst I am very grateful to my right hon. Friend for that answer, and I am certain that the information will be most interesting, may I ask whether he will accept on the part of the Government the long-term objective of equating the level of taxation in the country with that in all the other countries participating in the Common Market in order that our industries shall not continue to be crippled, in even worse conditions, by continued penal taxation?

Mr. Birch

Taxation here is high, of course, but if my hon. Friend will study the figures he will find that there are enormous variations in these countries and comparisions are not easy to make.

Following are the figures:

Country and rate of lax on company profits
Per cent.
United Kingdom:
Profits tax
On distributions 30
On undistributed profits 3
Income tax
On undistributed profits 42½
Belgium:
On distributions 20
On undistributed profits
First Fr. 150,000 25
Next Fr. 350,000 30
Next Fr. 5,000,000 35
Next Fr. 9,000,000 37½
Balance 40
Federal German Republic:
Corporation Tax
On distributions 30
On undistributed profits 45
Berlin Aid Tax 4.09
Income tax
On undistributed profits 25
France:
Company Tax 41.8
Italy:
Income Tax 18
Company Tax (on taxable profits excess of 6 per cent. of "taxable capital") 15
Luxembourg:
On total taxable profits
First Fr. 400,000 20
Next Fr. 600,000 30
Balance 40
Netherlands:
Corporation tax
First F1. 40,000 40
Next F1. 10,000 55
Balance 43

1. The rates shown are for 1956–57 for the United Kingdom and for other countries the latest rates which could be ascertained in the time available.

2. The table excludes those taxes on shareholders' income, which are, for convenience of collection, charged on companies and deducted by them from distributed profits.

3. The method of computing profits and the allowances and reliefs given to companies varies from country to country, and comparisons of the weight of direct taxation by reference to rates alone should be treated with reserve.