Now this is amusing:
Fortunately, a far better system is available: unitary tax. Instead of taxing multinationals according to the legal forms that their tax advisers conjure up, they are taxed according to the genuine economic substance of what they do and where they do it. Each company submits to the tax authorities of each country where it does business a “combined report” providing consolidated accounts for the whole global group, ignoring all internal transfers. The report specifies the group’s physical assets, workforce and sales and the overall profits are then divided up among jurisdictions according to a formula weighing these three factors. This system would benefit everyone, particularly developing countries.
So that’s his muckers, Nick Shaxson and John Christiensen.
And Ritchie adds:
This is the only way forward.
At which point we should note this:
Each company submits to the tax authorities of each country where it does business a “combined report” providing consolidated accounts for the whole global group, ignoring all internal transfers…….overall profits
This entirely obviates the need for country by country reporting. The very thing that Ritchie has been campaigning for for near a decade.
For the point of country by country is to insist that the corporation shows where it makes its profits so that profits can be taxed in that jurisdiction where they are made. But unitary taxation entirely ignores this distinction. We don’t care – indeed we don’t even look at – where the profits are made. We just look at the total and divide it by the formula.
Poor old Ritchie. He’s simply too dim to realise that he’s supporting something that entirely wipes out his last decade of work.