The profits are eventually taxed in that country but often at tiny rates.

Shire Pharmaceuticals, based in Basingstoke, was one company said by the MPs to have diverted profits to Luxembourg.

It paid just 0.0156% of its profits to the local tax authority, they said.
The main rate of corporation tax in the UK is 21%.

However Shire said it always complied with tax obligations in the jurisdictions in which it operates.

The MPs also accused PwC of misleading the committee at an earlier hearing.
“We consider that the evidence that PwC provided to us in January 2013 was misleading, in particular its assertions that ‘we are not in the business of selling schemes’, and ‘we do not mass-market tax products, we do not produce tax products, we do not promote tax products’,” said Ms Hodge.

In its defence, PwC said: “We stand by the evidence we gave the Public Accounts Committee and disagree with its conclusions about the work we do.

“But 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.

“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.”