In order to make this workable, the government would assume that certain industries make certain profit margins e.g. 8% assumed profit for the sale of goods to

In order to make this workable, the government would assume that certain industries make certain profit margins e.g. 8% assumed profit for the sale of goods to 32% assumed profit for the sale of services. [0][1] According to the FT: "the new tax would be a “deemed profits” tax rather than a corporation tax, so as to sidestep issues about double tax treaties. [...] the Treasury would identify profits that escaped tax in the UK because of royalty arrangements or the absence of a taxable presence. [...] It seems to be something completely novel . . . It is a huge stick that will stop this artificial avoidance. The difficulty will be how it is defined in practice.” [2] [0] Similar way to the way the UK flat rate VAT scheme works [1]http://www.internationallawoffice.com/newsletters/Detail.aspx?g=df76beff-e892-4399-a960-04b1de632483 http://www.internationallawoffice.com/newsletters/Detail.asp... [2] http://www.ft.com/cms/s/0/127010ea-7af9-11e4-b630-00144feabdc0.html#ixzz3KqqtmghP http://www.ft.com/cms/s/0/127010ea-7af9-11e4-b630-00144feabd...