§ Sir David MitchellTo ask the Chancellor of the Exchequer if he will list the latest rates of corporation tax applicable to shipping companies in each country of the European Union; and if he will make it his policy to bring United Kingdom rates into line with those elsewhere in the European Union. [2111]
§ Mr. JackThe rate of corporation tax in the United Kingdom is kept under frequent review. The UK continues to provide one of the lowest main rates in the European Union. The current main national rates of corporation tax applicable to shipping companies in each European Union country are in the table.
415W
Main national rates of corporation tax applicable to shipping companies in the European Union Percentage Country Rate Austria 34 Belgium 139 Denmark 34 Finland 25 France 233.33 Germany 345 Greece 4nil Ireland 510 Italy 637 Luxembourg 733 Netherlands 35 Portugal 836 Spain 935 Sweden 28 United Kingdom 33 Notes:
1 There is also a surcharge of 3 per cent., making an effective rate of 40.17 per cent.
2 There is also a surcharge of 10 per cent., making an effective rate of 36.66 per cent.
3 There is also a surcharge of 7.5 per cent. and local trade taxes (of an average 20 per cent.) which give an average total effective rate of 58 per cent. For distributed profits, the main rate is 30 per cent., giving an effective rate of 46.25 per cent. Companies engaged in international shipping can elect for certain of their profits (normally 80 per cent.) to be taxed at half the average rates they would otherwise pay provided relief in respect of any foreign tax borne by those profits is forfeited.
4 Profits from shipping are not subject to corporation tax. Instead a special tax, based on gross tonnage and age, is charged on usage of a vessel.
5 This special rate of corporation tax applies to manufacturing and the sale of goods. Certain shipping activities are deemed to be manufacturing for this purpose.
6 There is also local tax at 16.2 per cent., making an effective rate of 53.2 per cent.
Number of taxpayers affected and increases in tax revenue resulting from reinstating tax rates over 40 per cent. Region of residence 1992–93 1993–94 Numbers Thousands Amount £ million Numbers Thousands Amount £ million North 40 50 40 50 Yorkshire and Humberside 70 200 70 250 North west 90 200 90 250 East Midlands 70 200 70 150 West Midlands 90 200 80 200 East Anglia 40 100 40 100 South east 620 2,300 650 2,550 South west 90 250 80 250 Wales 30 50 30 50 Scotland 80 200 90 200 Northern Ireland 20 50 20 50 United Kingdom1 1,230 3,850 1,260 4,200 1Includes members of the forces and merchant navy and a small number of civil servants serving overseas who are not all allocated to regions.