International Tax

Low-income countries are more dependent on corporate income tax revenue than richer countries, and at the same time, disproportionately affected by multinational tax avoidance. Our research on this theme investigates ways in which developing countries can protect their tax bases, including through simplified transfer pricing methods and improved tax treaty policies. Our work on this theme also includes examination of the OECD’s Base Erosion and Profit Shifting (BEPS) process from the perspective of developing countries, as well as exploring alternative methods of taxing multinational companies, namely unitary taxation.

Publications:

February 2019
Taxing Multinational Business in Lower-Income Countries: Economics, Politics and Social Responsibility
by Michael C. Durst

The world’s lower-income countries face an urgent need for public revenue to build social and economic infrastructure. These countries, however, face a dilemma in seeking to tax the income of multinational companies operating within their borders. On the one hand, because lower-income countries face substantial limitations on their ability to raise revenue from broad-based taxes…

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November 2018
China’s Challenge to International Tax Rules and the Implications for Global Economic Governance
by Martin Hearson & Wilson Prichard

Twentieth century institutions of global economic governance face a profound challenge adapting to the rise of emerging markets and, especially, China’s rise. This is especially the case for the international tax regime, whose institutional home is the OECD and which is based on norms that favour capital exporting states. To understand the nature of the…

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November 2018
Problems of Transfer Pricing and Possibilities for its Simplification
by Sol Picciotto

This ICTD Research in Brief is a two-page summary of ICTD Working paper 86 by Sol Picciotto. This series is aimed at policy makers, tax administrators, fellow researchers and anyone else who is big on interest and short on time. The international system for taxation of the profits of multinational enterprises (MNEs) is deeply dysfunctional….

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November 2018
Problems of Transfer Pricing and Possibilities for Simplification
by Sol Picciotto

The defects in the rules for allocation of the income of transnational corporations (TNCs) are at the heart of the current crisis in international corporate taxation. This paper explains how these rules emerged and developed, becoming increasingly complex, as they have shifted from a general concern to ensure a fair and reasonable allocation of the…

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Profit-Split Method: Time for Countries to Apply a Standardized Approach
by Jeffery M. Kadet, Tommaso Faccio & Sol Picciotto

With the OECD issuance in June 2018 of its final guidance on the profit split method, individual countries must determine how they might consider and apply the profit split method (PSM) going forward. The OECD guidance issued reflects a consensus view that included input from the very large number of countries. The need for consensus…

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Taxing Africa: Coercion, Reform and Development
by Mick Moore, Wilson Prichard & Odd-Helge Fjeldstad

Taxing Africa is an accessible and comprehensive introduction to the crucial debates around taxation and development in Africa. Taxation has been seen as the domain of charisma-free accountants, lawyers and number crunchers – an unlikely place to encounter big societal questions about democracy, equity or good governance. Yet it is exactly these issues that pervade…

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May 2018
Linking Beneficial Ownership Transparency to Improved Tax Revenue Collection in Developing Countries
by Wilson Prichard

Recent years have witnessed an accelerating push to expand access to information on the beneficial ownership of corporate entities, in an effort to bring greater transparency to multinational corporation (MNC) tax strategies, identify personal tax-evading wealth held overseas and combat global networks of criminality and corruption. This effort remains in its infancy, but has made…

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November 2017
Assisting Developing Countries in Taxation after the OECD’s BEPS Reports: A Suggested Approach for the Donor Community
by Michael C. Durst

This paper explores how the international donor community might most productively offer technical assistance to developing countries in the area of taxation, in light of the OECD’s recently completed study of ‘base erosion and profit shifting’ (BEPS). The paper addresses both the political and the technical constraints facing developing country tax administrations. It recommends that…

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November 2017
How Can Governments of Low-Income Countries Collect More Tax Revenue?
by Mick Moore & Wilson Prichard

It is widely believed that the governments of many low-income countries, and especially the relatively poor performers, should be aiming to increase the proportion of GDP they raise in tax revenue. There are risks in emphasising increasing revenue at the expense of other objectives. Governments also need to be concerned with questions of equity, efficiency,…

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October 2017
How Kenya has Implemented and Adjusted to the Changes in International Transfer Pricing Regulations: 1920-2016
by Attiya Waris

A large proportion of international trade in goods and services is conducted between what are known technically as related parties. In practice, most of this trade is between different companies forming part of the same transnational corporate grouping. This is typically highly integrated in economic and financial terms, while legally appearing as a set of…

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Blogs:

November 2018
by Martin Hearson & Wilson Prichard

States are currently struggling to reach global agreement on the taxation of digital firms such as Apple and Google, suggesting that an international regime characterised by impressive coherence over a century may be beginning to fragment. While work on the politics of the international tax regime is still largely preoccupied with the US, a ‘great power’, this fragmentation largely…

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August 2018
by Kas Sempere

What does tax justice mean at the local level, and how can the experiences of informal market traders be linked with broader international campaigns? This blog draws out insights from ActionAid’s experience of incorporating the demands of market traders in Nigeria into its international tax justice campaign.

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May 2018
by Maya Forstater

Professor Sol Picciotto recently wrote an article which responds to a paper I wrote on the question of what is meant by “illicit financial flows” (IFFs) and in particular whether tax avoidance and tax planning by multinational enterprises should be included in the concept. As a reader of the ICTD website it is likely that…

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