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Unitary taxation : The case for global formulary apportionment

Sadiq, Kerrie (2001) Unitary taxation : The case for global formulary apportionment. Bulletin for International Taxation, 55(7), pp. 275-286.

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Abstract

Unitary taxation is the taxation of the worldwide income of a multinational enterprise (MNE) and is normally based on a formulary apportionment method, which allocates income to the relevant jurisdictions based on a percentage of the MNE's world-wide profits. The unitary taxation model has several advantages over the existing arm's length model: 1. Where MNEs are highly integrated, unitary taxation has greater consistency with economic reality. 2. Greater certainty is provided to taxpayers. 3. Unitary taxation conforms to the aim of efficient operations within the MNE. 4. The aim of unitary taxation, to find an equitable split of profits between the jurisdictions, should ultimately be the overall aim of any tax regime. The advantages and disadvantages associated with the adoption of a unitary taxation model through the implementation of a formulary apportionment approach to the taxation of MNEs are examined.

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ID Code: 50416
Item Type: Journal Article
Additional URLs:
Keywords: Unitary taxation
ISSN: 1819-5490
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Accountancy
Copyright Owner: Copyright 2001 International Bureau of Fiscal Documentation
Deposited On: 18 May 2012 08:38
Last Modified: 18 May 2012 08:38

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