§ Mr. BurnsTo ask the Chancellor of the Exchequer when he expects to publish the consultative document on proposals to implement the three direct tax measures adopted by the Economic and Finance Council in July 1990; and if he will make a statement.
§ Mr. MaudeOn 23 July 1990, the Economic and Finance Council adopted three proposals to remove possible tax obstacles to Communitywide business activity and cross-border expansion. The measures are the mergers directive, to defer certain tax charges that could otherwise arise on a cross-border merger or demerger; the parents/subsidiaries directive, to eliminate the double taxation of dividends and abolish withholding taxes on them when they are paid to a parent company in another member state; and the arbitration convention, to set up a mechanism to resolve transfer pricing disputes between taxing authorities in different member states.
In the Government's view, these are issues on which there should be full consultation before implementing legislation is brought forward. Accordingly, the Inland Revenue is today issuing a consultative document including draft clauses. Comments on the consultative document and draft legislation are invited by 14 February 1992. We shall carefully consider all comments and representations which are made before introducing the necessary legislative provisions at the earliest opportunity. I have placed copies of the document, including the draft clauses, in the Library.