§ Mr. Wakehamasked the Chancellor of the Exchequer what is the current annual rate of interest on overdue corporation 174W 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 BarnettInterest 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