HC Deb 09 March 1976 vol 907 cc173-4W
Mr. Wakeham

asked the Chancellor of the Exchequer what is the current annual rate of interest on overdue corporation tax expressed as a percentage equivalent of a gross rate of interest payable where such interest is allowable as a deduction for computing corporation tax; and what are the equivalent rates in the countries of the EEC, the USA and Japan, respectively.

Mr. Joel Barnett

Interest on overdue taxation is not allowed in the United Kingdom as a deduction against income for tax purposes. The following table shows the nominal rates of interest payable and the equivalents grossed up at the rates of tax appropriate to the income of companies. (Interest on overdue tax is deductible in the United States of America and no grossing-up is necessary.)

Net rate of interest Per cent. per annum Grossed-up equivalent Per cent. per annum
United Kingdom 9 18.75
Belgium 12 23.07
Denmark 12 19.04
France 10 20.00
Germany 12 25.27
Ireland 18 32.72
Italy 5 7.69
Luxembourg 6 10.00
Netherlands 10 19.29
Japan 14 23.33
U.S.A 9 9.00

In some countries, there are reduced rates in respect of company incomes which do not exceed certain amounts; the figures above have been calculated by reference to the full rates of tax

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