In response to the latest Paradise Papers revelations, which have seen large multinational companies exposed milking profits offshore, the Tax Justice Network is calling on countries around the world to start to tax the global profits of multinational corporations.
The current system of taxation used by most countries around the world seeks to tax only the local subsidiaries of each company. That encourages companies like Apple and Nike to shift their profits offshore – out of the reach of the tax authorities and into tax havens.
An alternative system of taxation, called “unitary taxation” instead calculates the tax liabilities of companies based on a proportion of the company’s global profits. The formula used to work out the tax is based on the real economic activities company, for example the sales it books in each country.
Unitary taxation is a system already employed in many developed economies such as Canada and some states in the United States.
— source taxjustice.net | George Turner | 6 Nov 2017