Is the International Tax System Fit for Purpose, Especially for Developing Countries?

International Centre for Tax and Development Working Paper 13

37 Pages Posted: 14 May 2014

See all articles by Sol Picciotto

Sol Picciotto

ICTD; Lancaster University - Lancaster University Law School; University of London, School of Advanced Studies, Institute of Advanced Legal Studies, Students

Date Written: September 1, 2013

Abstract

Taxes are a basis of national states, but they have been internationally coordinated since the emergence of taxes on income and profits, which were central to the legitimacy of taxation and the increased power of states in the 20th century. This paper traces the historical development of this international system, especially in relation to its interaction with the growth of transnational corporations (TNCs), and analyses attempts to adapt the system to the increasingly dominant role of TNCs in the world economy. It explains and discusses the key principles and concepts (permanent establishment, arm’s length, controlled foreign corporations, transfer pricing), and shows that they have become increasingly inadequate especially following recent renewed economic globalisation. Contributing to current debates on reform of the system, this paper puts forward proposals for an evolutionary shift towards a unitary approach for taxing TNCs.

Keywords: international tax; transnational corporations; unitary taxation

Suggested Citation

Picciotto, Sol, Is the International Tax System Fit for Purpose, Especially for Developing Countries? (September 1, 2013). International Centre for Tax and Development Working Paper 13, Available at SSRN: https://ssrn.com/abstract=2436409 or http://dx.doi.org/10.2139/ssrn.2436409

Sol Picciotto (Contact Author)

ICTD ( email )

Institute of Development Studies
Librar
Brighton, BN1 9RE
United Kingdom

Lancaster University - Lancaster University Law School ( email )

FLAT 5 REGENCY HOUSE, NEWBOLD TERRA
LEAMINGTON, CV32 4HD
United Kingdom

University of London, School of Advanced Studies, Institute of Advanced Legal Studies, Students ( email )

Charles Clore House
17 Russell Square
London, WC1B 5DR
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
453
Abstract Views
1,424
rank
87,822
PlumX Metrics