Corporation tax as a problem of MNC organisational circuits: The case for unitary taxation

The tax practices of multinational corporations have become a matter of significant public and political concern. The underlying issues are rooted in the capacity of multinational corporations (MNCs) to construct organisational circuits that shift where sales, revenue and profit are reported. This capacity in turn becomes a focus because of the way MNCs are treated as a series of separate entities, subject to the arm’s length principle. This has become a classic example of a system whose current form and consequences were not foreseen when the original principles were set out. The continued existence of that system owes more to specific interests and inertia than it does to the absence of a viable alternative. Unitary taxation based on formula apportionment clearly resolves the underlying issues and unitary taxation may well ultimately emerge as a new generalised basis for corporate taxation. However, for it to do so, the problems of the current system and the advantages of the alternative need to be more clearly understood within academia, business and on a societal basis. This paper is a contribution to such an understanding

A perspective on multinational enterprise’s national identity dilemma

This conceptual paper identifies gaps and contributes to the literature on ‘identity’ dilemmas faced by multinational enterprises operating in a globalised world. Various characteristics and business strategies of multinational enterprises are delineated and analysed through the lens of social identity theory and international business concepts such as market and institutional logic. Our analysis, based on multiple cases, and derived from a variety of industries and countries, associates the identity dilemma to informed business strategy. Our findings suggest that while multinational enterprises face identity dilemmas that they sometimes use to their advantage, it also poses several challenges. Through our conceptualisation, we derive five distinct propositions to shape future research directions

Taxing the powerful, the rise of populism and the crisis in Europe: the case for the EU Common Consolidated Corporate Tax Base

Contemporary populism is rooted in a crisis of legitimacy. Corporate taxavoidance by multinationals is one cause of that crisi s. Although states tend to beincreasingly formally committed to tackling avoidance, they do so in a system thatpromotes contradictory sets of behaviour. This tends to undermine attempts to solvethe problem of avoidance unless a more transformative collective approach is taken.Ironically, despite its own democratic deficit, the European Comm ission has taken aleading role in promoting such a solution: the Common Consolidated Corporate TaxBase (CCCTB). In this paper, I set out the case for ‘unitary taxation’ based on theCCCTB and state some of its current problems. The problem of corporation taxraises a basic issue in terms of who is sovereignty for, and solving the problemprovides an important contribution to legitimacy of both the state and the EU