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10
Nov

Time for a change in international tax

Tax Justice comes up with new formula of multinationals‘ taxation

Famous tax campaigners Tax Justice published a paper, which presents the idea ofUnitary Taxation approach for large transnational corporations (TNCs).

Unitary Taxation would treat a TNC engaged in a unified business as a single entity, requiring it to submit a single set of worldwide combined or consolidated accounts in each country where it has a business presence, and apportioning the overall profit according to a weighted formula reflecting the proportion of its actual presence in each country.

Such approach, on opinion of Tax Justice experts, would provide a true overall view of the firm, eliminating profit shifting both by transfer pricing and the use of tax havens. Complemented also by a requirement for country-by-country reporting of the taxes actually paid, this would be a giant step towards setting the international tax system on a basis of transparency and effectiveness, and hence restoring the legitimacy of taxation in all countries.

www.taxjustice.net