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The ICTD’s research in this field has focused on corporate income taxation (CIT). Low-income countries are particularly dependent on CIT, which accounts for 16% of their revenue on average, compared to 8% for richer countries. A consultation we held in 2012 highlighted that pressures for reforms in international tax rules would mean a period of rapid change This indicated a need for research to identify issues for developing countries and help them introduce suitable reforms. A general overview was provided in the lecture at the Centre’s annual meeting in 2012 by Sol Picciotto. A study by the IMF in 2014 analysed and estimated the effects of ‘spillovers’ in international taxation, finding their impact to be much greater on developing countries, and an ICTD working paper by Cobham and Jansky provided further estimations of the misalignment of profits of multinational enterprises (MNEs).

International efforts have mainly focused on the project on base erosion and profit shifting (BEPS), launched in 2013 by the the Organisation for Economic Cooperation and Development (OECD), backed by G20 world leaders, who mandated reforms to ensure that MNEs could be taxed ‘where economic activities occur and value is created’. In parallel, the ICTD supported a programme to examine the implications for developing countries of a move towards achieving this aim by taxing multinationals as unitary firms. This resulted in a series of working papers, brought together in an edited book published in 2017, which also evaluated the outcomes of the first phase of the BEPS project. A paper by Veronica Grondona and Andres Knobel recounted the history of Argentina’s efforts to deal with the problem of transfer pricing, and Attiya Waris studied the more recent experience of Kenya. We also published studies of Africa’s response to the BEPS action plan, and later a critique of some of its outcomes, both by Annet Oguttu. A summary brief in 2017 outlined what we have learned about MNE taxation.

The ICTD has also supported work on more specific issues, focusing on ideas for protecting the corporate tax base of developing countries. Michael Durst analysed the difficulties for developing countries of applying the OECD proposals for limitation of interest deductions, and proposed an alternative simplified transfer pricing method. Durst also suggested in another paper that developing countries should give priority to business taxes that are easier to collect than the CIT. He and Kimberly Clausing showed that for natural resource taxation a price-based royalty tax has some of the attractions of an income or resource rent tax, while being easier to administer and less susceptible to tax avoidance. Mick Moore, the ICTD’s CEO, also wrote on alternative options for low-income countries.

The ICTD’s work has also extended to some aspects of tax treaty policies, including a review of Uganda’s treaties by Martin Hearson and Jalia Kangave, and Sol Picciotto’s analysis of the causes of international tax disputes and the operation of the treaty provisions for resolving them (also available as a summary). A paper by Martin Hearson introduced a new dataset, hosted by the ICTD, which codes the content of over 500 tax treaties of low- and middle-income African countries, and provided some analysis of trends.

Funding from the Bill & Melinda Gates Foundation has enabled the ICTD to continue research in this area. Two African researchers have joined the ICTD team: Alexander Ezenagu, who is focusing on simplified methods in transfer pricing (especially safe harbour rules), and Catherine Ngina Mutava, who is working on aspects of tax treaty policies for African countries.

The ICTD welcomes proposals from researchers, especially in Africa, for focused projects in this field. For further information please contact Simon Rees at This email address is being protected from spambots. You need JavaScript enabled to view it. 

Selected Publications

Measuring Misalignment: the Location of US Multinationals’ Economic Activity Versus the Location of their Profits (Working Paper 47)

Improving International Tax Dispute Settlement (Research in Brief 14)

What Have We Learned About International Taxation and Economic Substance? (Summary Brief 9)

Taxing Multinational Enterprises as Unitary Firms (Book)

International Corporate Taxation (Summary Brief 3)

Limitations of the BEPS Reforms: Looking Beyond Corporate Taxation for Revenue Gains (Working Paper 40) 

A Price-Based Royalty Tax? (Working Paper 41) 

Limitations on Interest Deductions: A Suggested Perspective for Developing Countries (Working Paper 36)

Measuring Tax Treaty Negotiation Outcomes: The ActionAid Tax Treaties Dataset (Working Paper 47)

Tax Base Erosion and Profit Shifting in Africa – Part 1: Africa’s Response to the OECD BEPS Action Plan (Working Paper 54) 

Tax Base Erosion and Profit Shifting in Africa – Part 2: A Critique of Some Priority OECD Actions from an African Perspective (Working Paper 64) 

See all our publications on international taxation here.

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