George Turner ■ Day 2 #paradisepapers revelations – Global corporations need global taxation

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In response to the latest Paradise Papers revelations, which have seen large multinational companies exposed milking profits offshore, the Tax Justice Network is calling on countries around the world to start to tax the global profits of multinational corporations.

The current system of taxation used by most countries around the world seeks to tax only the local subsidiaries of each company. That encourages companies like Apple and Nike to shift their profits offshore – out of the reach of the tax authorities and into tax havens.

An alternative system of taxation, called “unitary taxation” instead calculates the tax liabilities of companies based on a proportion of the company’s global profits. The formula used to work out the tax is based on the real economic activities company, for example the sales it books in each country.

Unitary taxation is a system already employed in many developed economies such as Canada and some states in the United States.

Unitary taxation would be simple to operate and save tax authorities millions in complex investigations. It would also demand the publication of country by country reports by multinationals, so that we would know how much tax, and how much profits were being made in each country that large corporations operate in.

The Tax Justice Network has produced a full briefing on the issue, which can be downloaded here: https://www.taxjustice.net/wp-content/uploads/2017/11/Unitary-Taxation-TJN-Briefing.pdf

Alex Cobham, Chief Executive Officer of the Tax Justice Network said:

The current tax system is broken beyond repair. After two years of the OECD trying to patch up the system, even its biggest members the EU and US have given up and are looking at alternatives.

If we want to stop companies like Apple taking a bite out of our public services, we need a much better way of taxing multinationals.

Unitary taxation would save governments billions in lost tax revenues – as well as making multinationals and tax authorities accountable to citizens in a completely new way.

Liz Nelson said:

The only people who benefit from our outdated, bloated, tax system are the multinationals who abuse it, and their advisors who make billions dreaming up tax avoidance schemes.

A new simpler way of taxing multinationals is needed to make sure we all know who is paying their fair share.

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Comments • 2

  • David Walker
    November 7, 2017 - 1:14 am

    A good article – thank you. What these tax dodgers do is grossly unfair and unethical (neither of which bother them one iota!). The unitary tax system seems like a fair solution. However, knowing that “where there’s a will there’s a way”, and that many of our politicians are immersed in tax evasion/ minimisation/ avoidance also, it’s not surprising that changes never seem to come in. Imagine the kind of pressure applied to N.Korea being applied to countries that sell themselves as tax havens!

  • Mitch RitterParadigm Shifters
    November 7, 2017 - 9:56 pm

    Sovereignty for the Feudal Lords of Finance and their clients among the Corporate Caliphate. Serfdom in the form of ‘customer service’ for the rest of U.S. There are dots to be connected with the legal Treasure Islands money laundering industry and the so-called Free Trade Agreements (FTA’s in U.S. political parlance).

    Especially those ISDS (Investor State Dispute Settlements)clauses which allow the Corporate Caliphate and Feudal Lords of Finance to bypass any nation’s judicial system and international law. This is why during the 2 years of 247 broadcast of the U.S. Presidential primaries and general elections along with globally televised debates not a single accredited journalist asked any questions to any candidate in front of a live camera or microphone any questions that would have deepened the body politic’s understanding of these so-called Free Trade Agreements (or their outcomes, which get no Business Media coverage, or daily TRADE DEAL SCOREBOARDS as occurs with the meaningless ritual of thrice daily Dow Jones score boards).

    Any costbenefit analysis is like https://www.taxjustice.net or the not-for-profit International Consortium of JournalistsReporters that feed the profit-maximizing corporate-captured news media their outsource investigative journalism, left like carrion for what remains of Public Interest journalism like PUBLIC CITIZEN’s online ‘zine COMMON DREAMS. Here’s one 5 years later recap of the Obama Administration’s (Democrats voted in minority to approve it while the so-called obstructionist GOP Tea Party Republicans voted in the majority to back the Obama global trade template for Trans Pacific Partnership back in 2012): https://www.commondreams.org/newswire/2017/03/15/unhappy-fifth-anniversary-us-korea-free-trade-agreement-deficit-korea-has

    Mitch RitterParadigm Shifters
    Lay-Low Studios, Ore-Wa
    Media Discussion List

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