§ Sir L. SCOTTasked the Chancellor of the Exchequer what foreign countries, the competition from which has to be faced by British manufacturers, have an Income Tax upon the profits of companies; whether, in any such country, Income Tax is levied upon
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— Duty on Home-made Spirits. Duty on Imported Spirits. Total £ £ £ Estimated Revenue 1924–25 … … … 44,500,000 8,500,000 53,000,000 Receipts 1924–25 … … … 42,830,000 8,229,000 51,059,000 Estimated Revenue 1925–26 … … … 42,700,000 8,300,000 51,000,000 that part of the annual profits of the company which is not distributed in dividend to the shareholders, but is put to reserve and utilised for the replacement of plant or machinery or for other purposes of development; and if he can give short particulars as to the method by which such exemption or abatement of tax upon profits so utilised is effected and by what method the public revenue is protected by insuring that such profits, if subsequently taken from reserve and distributed either in cash or shares, are brought into charge?
§ Mr. CHURCHILLMy hon. and learned Friend will no doubt permit me to confine myself to such information as is available to me regarding the principal countries he has in mind, and I will take Belgium, France, Germany and the United States. Broadly speaking, the Income Tax upon the profits of companies in these countries provides for no relief as respects profits reserved for development purposes. In the first three countries named, dividends distributed are also subject in the hands of the individual to the general Income Tax levied upon the total personal income. In the United States, companies are liable to a normal rate of tax 6½ per cent. in excess of that levied upon individuals, and, in addition, are subject to a Capital Stock Tax.