Mr. Philip Kermode:

I suspect Mr. Lynch will have more to say on this than I have, but I caution the Deputy about this. The way any given number of multinationals treat royalty payments depends on where their headquarters are and where they do their business. If one looks at other jurisdictions that do not have the same mix of multinationals and domestic companies or the same the mix in business terms, one might find very different reactions. However, as I said earlier, the underlying feature of BEPS is that there is a recognition that multinationals can use intellectual property and royalty payments to shift profits between jurisdictions in a way that would be seen by many as being artificial. One of the key points of the BEPS exercise is to try to deal with the so-called transfer pricing aspects of this and to put prices on the intellectual property transfers and on the dealings between these different elements of corporate groups so they reflect a business reality. However, this is far from being a simple exercise.