Taxing the Residual Profit of Multinational Enterprises: A Critique of Formulaic Apportionment and a Proposal
Wolfram Richter
No 35, EconPol Policy Brief from ifo Institute - Leibniz Institute for Economic Research at the University of Munich
Abstract:
According to plans put forward by the OECD/G20 Inclusive Framework on BEPS, a share of residual profit earned by eligible MNEs is to be taxed by market jurisdictions. For this purpose, revenue-based formulaic apportionment of residual profit is proposed. This note argues against the use of a rule requiring the multilateral assessment of MNEs’ worldwide profit and recommends an alternative method of sharing taxing rights with market jurisdictions. The proposed method relies on unilateral profit splitting and is suggested by the application of Shapley value theory to the fair and equitable division of taxing rights between cooperating jurisdictions.
Date: 2021
New Economics Papers: this item is included in nep-acc, nep-gth, nep-pbe and nep-pke
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)
Downloads: (external link)
https://www.ifo.de/DocDL/EconPol_Policy_Brief_35_F ... _Profit_Critique.pdf (application/pdf)
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:ces:econpb:_35
Access Statistics for this paper
More papers in EconPol Policy Brief from ifo Institute - Leibniz Institute for Economic Research at the University of Munich Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().