WASHINGTON -- The United Kingdom's chancellor of the exchequer yesterday reserved the right to retaliate against U.S. companies in response to any state tax action that imposes a worldwide unitary tax on U.K.-based multinational companies.
In a statement made in the House of Commons, Kenneth Clarke said he is "disappointed" by the Supreme Court's decision yesterday in Barclays Bank v. California, which upholds California's worldwide unitary method of taxation.
"The U.K. will retain its retaliatory powers against the possibility that the states might damage U.K.-owned companies at some time in the future," Clarke said.
However, California's passage of legislation last year allowing companies to elect without penalty to be taxed by some other method "should ensure that in future, no British-owned company is exposed to damage there from the imposition of worldwide unitary tax," Clarke said.
"We will be following closely the detailed regulations and the practical implementation of this law," he said.