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Tesco avoiding property tax deals through Cayman Islands, says report

Tesco avoiding property tax deals through Cayman Islands, says report

Britain's biggest retailer Tesco is using a complex array of companies in the Cayman Islands to avoid paying corporation tax on property transactions, The Guardian reported yesterdy.
The company defended its practice to the paper, arguing that it had a duty to operate as tax-efficiently as possible, and noted that it was one of the country's biggest taxpayers.
The report comes as Britain attempts to crack down on wealthy individuals who have avoided paying tax through Liechtenstein, after a whistle-blower provided details to the government's tax collection agency.
According to The Guardian, which examined company documents relating to the Cayman Islands companies, Tesco will avoid paying tax on an estimated 500 million British pounds (US$1 billion) worth of profit made from two property transactions.
The company has committed to selling billions of pounds worth of its property and then leasing it back in an effort to extract cash locked in the real estate its stores occupy.
The two property deals include a 445-million-pound sale-and-leaseback agreement with British Airways's pension fund, and a 650-million-pound deal with British Land.
Tesco has created a series of companies, named after different colors, in the Cayman Islands, where corporation tax is set at zero percent, and is using the companies to avoid paying tax on the property deals, The Guardian reported.
"We have an open relationship with Her Majesty's Revenue and Customs and meet with them regularly to discuss our tax affairs including our property and international transactions," Lucy Neville-Rolfe, Tesco's executive director of corporate and legal affairs, was quoted saying.


Updated : 2021-07-24 23:40 GMT+08:00