Tuesday, April 19, 2022
Shay: The Misleading Attract Of Taxing “Residual Earnings”
Stephen E. Shay (Boston School; Google Scholar), The Misleading Attract of Taxing “Residual Earnings”, 75 Bull. Intl. Taxn. 527 (2021):
This text outlines the normal justifications for a residual income enterprise tax base and evaluates its function within the OECD/G20 Pillar One proposal to allocate earnings to market international locations. The article concludes that basing the allocation of income to market international locations on multinationals’ residual income could be inferior to allocating a portion of whole company income.
Conclusion
Taxing residual income garners enthusiasm on the drafting board, however it has but to ship on the promise held out by financial principle. The attract is misleading in relation to the fact. The attract is even additional eliminated in relation to Pillar One. There doesn’t look like a compelling purpose to import residual-profit taxation into the Pillar One regime.
https://taxprof.typepad.com/taxprof_blog/2022/04/shay-the-deceptive-allure-of-taxing-residual-profits.html