(MENAFN- AFP) British lawmakers accused major accountancy firm PricewaterhouseCoopers of promoting "tax avoidance on an industrial scale" on Friday in an investigation called in the wake of the so-called Luxleaks scandal.
The public accounts committee, a cross-party group of MPs, examined how accountants advise firms to help them reduce their tax.
The investigation was called following revelations of secret tax deals in Luxembourg that saved companies like Apple, Ikea and Pepsi billions of dollars in taxes.
The committee said the leaks showed PwC had helped companies avoid tax.
"We believe that PwC's activities represent nothing short of the promotion of tax avoidance on an industrial scale," said committee chair Margaret Hodge.
"The effect has been to reduce the amount of corporation tax that some multinational companies pay in the countries in which they make their profits."
The report urged the government to take a tougher line on regulating the tax industry "as it evidently cannot be trusted to regulate itself".
It found that under tax-avoidance schemes, profits for some companies were artificially reduced in countries with higher tax rates, through payments made to subsidiaries located in lower-tax Luxembourg.
Companies advised by PwC included Amazon, Ikea, Burberry, Accenture, Coca-Cola and Vodafone, according to the report.
The committee advised the British tax authority to do more to challenge the advice given by accountancy firms to clients and ensure tax liabilities "reflect the substance of where companies conduct their business".
In addition, it recommended the introduction of a new code of conduct for tax advisers.
PwC said it disagreed with the report's conclusions.
"We recognise we need to do more to explain the positive role we play in the tax system and in helping businesses to operate successfully," the company said in a statement.
"We agree the tax system is too complex, as governments compete for investment and tax revenues. We take our responsibility to build trust in the tax system seriously and will continue to support reform."
The Luxleaks scandal erupted when 28,000 pages of documents on tax breaks won by 340 companies were obtained by the International Consortium of Investigative Journalists (ICIJ).
Two employees at PwC have been charged in connection with the leaks.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.