Taxing Profit in a Global Economy

The international tax system is in dire need of reform. It allows multinational companies to shift profits to low tax jurisdictions and thus reduce their global effective tax rates. A major international project, launched in 2013, aimed to fix the system, but failed to seriously analyse thefundamental aims and rationales for the taxation of multinationals' profit, and in particular where profit should be taxed. As this project nears its completion, it is becoming increasingly clear that the fundamental structural weaknesses in the system will remain.This book, produced by a group of economists and lawyers, adopts a different approach and starts from first principles in order to generate an international tax system fit for the 21st century. This approach examines fundamental issues of principle and practice in the taxation of business profit andthe allocation of taxing rights over such profit amongst countries, paying attention to the interests and circumstances of advanced and developing countries. Once this conceptual framework is developed, the book evaluates the existing system and potential reform options against it.A number of reform options are considered, ranging from those requiring marginal change to radically different systems. Some options have been discussed widely. Others, particularly Residual Profit Split systems and a Destination Based Cash-Flow Tax, are more innovative and have been developed atsome length and in depth for the first time in this book. Their common feature is that they assign taxing rights partly/fully to the location of relatively immobile factors: shareholders or consumers.Stepping back from current political debates on combatting profit shifting and how taxing rights over the profits of the digitalized economy should be allocated, this book undertakes a fundamental review of the existing international system of taxing business profit. It argues that the existingsystem is fundamentally flawed, and that there is a need for radical reform.

Business & Money

Vella, John

Auerbach, Alan J.

Keen, Michael

Devereux, Michael P.

Oosterhuis, Paul

Schön, Wolfgang

Business Culture

Oxford University Press

Review\n"The ability for a lay reader to distil (however broadly) some essentials about current and future approaches to international tax indicates an impressive marshalling of arguments in this most labyrinthine of areas." -- Tom Proverbs-Garbett, Law Society Gazette\nThis book undertakes a fundamental review of the existing international system of taxing business profit. It steps back from the current political debates on how to combat profit shifting and how taxing rights over the profits of the digitalized economy should be allocated. Instead, it starts from first principles to ask how we should evaluate a tax on business profit―and whether there is any good rationale for such a tax in the first place. It then goes on to evaluate the existing system and a number of alternatives that have been proposed. It argues that the existing system is fundamentally flawed, and that there is a need for radical reform. The key conclusion from the analysis is that there would be significant gains from a reform that moved the system towards taxing profit in the country in which a business made its sales to third parties. That conclusion informs two proposals that are put forward in detail and evaluated: the Residual Profit Allocation by Income (RPAI) and 
the Destination-based Cash Flow Tax (DBCFT).\nThe book is authored by group of economists and lawyers―the Oxford International Tax Group, chaired by Michael P. Devereux. It draws insights from both economics and law―including economic theory, empirical evidence on the impact of taxes, and an examination of practical issues of implementation―to assess the existing system and to consider fundamental reforms. This book will be useful to tax policy makers, tax professionals, academics, and anyone interested in tax policy.

The examination systematically addresses the typical areas of conflict with regard to a closed corporation. In do so, legally-based comparative experience and findings from business economics are applied, while the European private company is consistently taken into account.

Rechtsregeln für die geschlossene Kapitalgesellschaft (Zeitschrift für Unternehmens- und Gesellschaftsrecht/ZGR – Sonderheft, 18) (German Edition)

Eidenmüller, Horst

Bachmann, Gregor

Fleischer, Holger

Engert, Andreas

Business

Walter de Gruyter

The renowned authors of this ECFR special volume systematically develop legal standards and regulatory frameworks for closed corporations in Europe (including of course the Societas Privata Europaea), putting a strong focus on the economic practice and efficiency. The profound, in-depth analysis of the objectives and strategies comes to groundbreaking insights and also offers specific solutions for a multitude of practical aspects.

Regulating the Closed Corporation (European Company And Financial Law Review - Special Volume, 4)

de Gruyter

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