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dc.contributor.authorAvi-Yonah, Reuven
dc.contributor.authorPouga Tinhaga, Zachée
dc.date.accessioned2016-04-11T11:48:00Z
dc.date.available2016-04-11T11:48:00Z
dc.date.issued2014-11
dc.identifier.citationAvi-Yonah, R. and Pouga Tinhaga, Z. (2014) Unitary Taxation and International Tax Rules. ICTD Working Paper 26. Brighton: IDS.en
dc.identifier.isbn978-1-78118-176-8
dc.identifier.urihttps://opendocs.ids.ac.uk/opendocs/handle/20.500.12413/11175
dc.descriptionunitary taxation; tax; international tax; formulary apportionment; separate accounting; arm’s length standard; developing countries; multinational companies.en
dc.description.abstractAny proposal for adoption of a unitary tax (UT) system ought to clear the first and most common hurdle of its compatibility, or lack of it, with the current norms in the international tax system – specifically, the current tax treaty network. This paper argues that unitary taxation is compatible with most of the current bilateral tax treaties and local countries’ national tax laws. The first argument levelled against UT is the revision of the United States (US) and Organisation for Economic Co-operation and Development (OECD) model tax treaties to specifically exclude application of UT through formulary apportionment. However, this argument carries little to no weight because most tax treaties currently outstanding, including those signed as recently as 2011 and even involving the US, do not adopt the changes and still contain Article 7 language allowing for a unitary approach. Another argument for incompatibility is that separate accounting (SA) and arm’s length standard (ALS) are so enshrined in tax treaties that they have become some sort of international law that is binding even when not explicitly stated. This argument, again, has no merit. On the one hand, it is well established that tax treaties, specifically model tax treaties, do not create a right to tax and cannot create a binding rule of law, even international law. On the other hand, and assuming the wide embodiment of SA into the treaties creates some sort of international binding norm, the same argument would hold for UT because the Article 7(4) language that authorises UT is still very present in most tax treaties currently outstanding. We acknowledge that a complete transition from SA to UT would be a long-term process requiring major revisions across the international tax regime; however, it is our view that countries in general, and developing countries in particular, can legally apply UT because it is in compliance with both the tax treaties they have signed, if any, and their national laws.en
dc.description.sponsorshipDfID, NORADen
dc.language.isoenen
dc.publisherInstitute of Development Studiesen
dc.relation.ispartofseriesICTD Working Paper;26
dc.rightsUnitary Taxation and International Tax Rules Reuven Avi-Yonah and Zachée Pouga Tinhaga ICTD Working Paper 26 First published by the Institute of Development Studies in November 2014 © Reuven Avi-Yonah and Zachée Pouga Tinhaga 2014 ISBN: 978-1-78118-176-8 The authors of this paper grant to the IDS and the ICTD a perpetual, irrevocable, worldwide, royalty-free, non-exclusive licence, or sublicence, to reproduce, communicate to the public, use, adapt, publish, distribute, display and transmit the work in any and all media, and to sublicense others (including the Crown) to reproduce, communicate to the public, use, adapt, publish, distribute, display and transmit the work in any and all media, for non-commercial purposes and with appropriate credit being given to the authors and ICTD funders. A catalogue record for this publication is available from the British Library. This work has been licensed by the copyright holder for distribution in electronic format via any medium for the lifetime of the OpenDocs repository for the purpose of free access without charge and can be found at http://opendocs.ids.ac.uk/opendocs/ Also available from: International Centre for Tax and Development Institute of Development Studies Brighton BN1 9RE, UK Tel: +44 (0) 1273 606261 Fax: +44 (0) 1273 621202 E-mail: info@ictd.ac Web: www.ictd.ac IDS is a charitable company limited by guarantee and registered in England (No. 877338)en
dc.rights.urihttp://www.ids.ac.uk/files/dmfile/IDSOpenDocsStandardTermsOfUse.pdfen
dc.subjectEconomic Developmenten
dc.titleUnitary Taxation and International Tax Rulesen
dc.typeIDS Working Paperen
dc.rights.holder© Reuven Avi-Yonah and Zachée Pouga Tinhaga 2014en
dc.identifier.externalurihttp://www.ictd.ac/publication/2-working-papers/19-unitary-taxation-and-international-tax-rulesen


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