The Association of Chartered Certified Accountants (ACCA) says an academic report it commissioned from RMIT University School of Economics, Finance and Marketing provides extensive evidence that the corporate income tax system is not “broken” and that it is not being eroded. The report Multinational corporations, stateless income and tax havens asserts that there is no evidence to support the belief that the UK or the US corporate income tax base is being worn away. It offers a critique of the stateless income doctrine and the interaction between tax havens and multinational corporations.
Sinclair Davidson, author of the report and professor at the School of Economics, Finance and Marketing at RMIT, says: “The argument is that the corporate income tax base is being eroded by aggressive tax planning by multinational corporations – yet the evidence to support this argument is lacking. It is one thing to point out that multinational corporations do not pay tax in some jurisdictions but that says nothing about the actual corporate income tax base. To the extent that corporate income tax revenues have fallen in recent years, this is more likely to be a result of poor economic conditions than aggressive tax planning.”
Multinational corporations are fully compliant with the law of the land in those economies where they operate and the governments of those economies have been unwilling to change the international income tax norms and tax architecture, the report said.
[LTN 65, 4/4/14]