The US auto parts company revealed it was under pressure from the country’s Internal Revenue Service to pay its taxes locally, even as its tax base is located in Great Britain.
The supplier has its headquarters out of Detroit and is among the big companies targeted by the IRS over the use of offshore tax havens, but it declared it would “vigorously contest” the US tax regulator’s desire to file taxes as a normal, domestic business.
“We will continue to prepare and file our financial statements on the basis that neither Delphi Automotive LLP nor Delphi Automotive Plc is a domestic corporation for U.S. federal income tax purposes,” the company said in a filling.
The IRS announced Delphi in June that the company would need to file taxes as a US company because Delphi Holdings LLP acquired its assets after the supplier was out of the bankruptcy procedure, completed in 2009. The company responded and revealed it was reincorporated in the UK as a limited liability partnership, after it filed federal partnership tax returns in the US between 2009 and 2011.
Companies are increasingly attracted to the UK, after previously incorporating into countries like the Caribbean Islands or Switzerland, because Great Britain changed the tax laws to allow companies operating globally to keep their offshore profits outside the country’s tax ambit.