Submitted by: Submitted by hichem841
Views: 185
Words: 15922
Pages: 64
Category: Business and Industry
Date Submitted: 04/22/2013 12:02 PM
Under Strict Embargo until 00h01 Sunday 9 December 2012
TOWARDS UNITARY TAXATION OF TRANSNATIONAL CORPORATIONS
Sol Picciotto
Contents
Overview Introduction 1. How We Got Here 1.1 1.2 1.3 1.4 1.5 1.6 1.7 2. Brief Historical Summary Tax Treaties and International Tax Coordination Origins of the Tax Treaty Principles International Apportionment and the Arm’s Length Principle The Tax Treaty System and International Avoidance Problems with the ALP Advantages and Limits of the ALP
1 2 2 2 4 4 5 5 7 8 9 9
The Unitary Taxation Approach 2.1 The Combined Report
2.4.2 Labour 2.4.3 Sales 2.5 3. Weighting the Factors in the Formula
12 12 12 14 14 14 14 15 16 16 17
A Managed Transition 3.1 3.2 Conducting Studies Adoption of Unitary Taxation by Groups of Countries 3.2.1 Combined Reporting with Formulary Apportionment by US States 3.2.2 The CCCTB in the EU 3.2.3 Extending and Deepening Unitary Taxation 3.3 Introduction of Unitary within the Present System
Sources Boxes Box 1: Box 2: Box 3: Box 4: Box 5: Tax treaties in the international tax system Controlled Foreign Corporations (CFCs) Accepted Methods for Transfer Price Adjustment under the ALP Transfer Price Adjustments The Example of Amazon
3 6 7 9 9
TAX JUSTICE NETWORK
TOWARDS UNITARY TAXATION OF TRANSNATIONAL CORPORATIONS
Sol Picciotto1
Overview
The problem
It has become clear that we need to take a fresh look at how transnational corporations (TNCs) are taxed. This paper, building on long experience and analysis of the actual practice of tax administrations around the world, proposes a thorough reform of the system towards a fresh approach: Unitary Taxation. This would help place the international tax Currently, multinationals are taxed under an international system whose basic structures were devised a century ago. Under unitary taxation, they would be taxed not according to the legal forms that their tax advisers create for them, as is currently the case, but according to the...