Efficient Economic Rent Taxation Under A Global Minimum Corporate Tax PDF Download
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Author | : Mr. Shafik Hebous |
Publisher | : International Monetary Fund |
Total Pages | : 41 |
Release | : 2024-03-15 |
Genre | : Business & Economics |
ISBN | : |
Download Efficient Economic Rent Taxation Under a Global Minimum Corporate Tax Book in PDF, ePub and Kindle
The international agreement on a corporate minimum tax is a milestone in global corporate tax arrangements. The minimum tax disturbs the equivalence between otherwise equivalent forms of efficient economic rent taxation: cash-flow tax and allowance for corporate equity. The marginal effective tax rate initially declines as the statutory tax rate rises, reaching zero where the minimum tax is inapplicable, and increases thereafter. This kink occurs at a lower statutory rate under cash-flow taxation. We relax the assumption of full loss offset; provide a routine for computing effective rates under different designs; and discuss policy implications of the minimum tax.
Author | : Mr. Shafik Hebous |
Publisher | : International Monetary Fund |
Total Pages | : 26 |
Release | : 2024-03-22 |
Genre | : Business & Economics |
ISBN | : |
Download Deciphering the GloBE in a Low-Tax Jurisdiction Book in PDF, ePub and Kindle
Pillar Two rules of the Inclusive Framework agreement on a minimum corporate tax (known as ‘Global Anti-Base Erosion Rules’, for short GloBE) have important implications for the design of the corporate income tax. This chapter discusses these implications particularly from the perspective of low-tax jurisdictions. It argues that it is not possible to design a system that always guarantees generating exactly the bare minimum tax intended by the rules and motivates that this should not be the policy objective anyway. Importantly, if no profit tax already exists, countries need to consider whether to adopt one, and if yes, in what form. There is a case for introducing a general profit tax beyond the GloBE rules, together with a qualifying GloBE domestic minimum top-up tax as a backstop. The familiar alternatives of efficient economic rent tax designs, however, are no longer equivalent under the GloBE. In practice, given the specifics of the rules, an efficient rent tax on in-scope multinationals cannot be combined with a statutory tax rate below a certain cutoff, because the minimum tax becomes always binding. Under the GloBE, immediate expensing particularly maintains the time-value of fully deducting the cost of investment, without impacting the GloBE effective tax rate.
Author | : Michael P. Devereux |
Publisher | : Oxford University Press |
Total Pages | : 416 |
Release | : 2021-01-21 |
Genre | : Law |
ISBN | : 0192535587 |
Download Taxing Profit in a Global Economy Book in PDF, ePub and Kindle
This is an open access title available under the terms of a CC BY-NC-ND 4.0 licence. It is offered as a free PDF download from OUP and selected open access locations. This book undertakes a fundamental review of the existing international system of taxing business profit. It steps back from the current political debates on how to combat profit shifting and how taxing rights over the profits of the digitalized economy should be allocated. Instead, it starts from first principles to ask how we should evaluate a tax on business profit—and whether there is any good rationale for such a tax in the first place. It then goes on to evaluate the existing system and a number of alternatives that have been proposed. It argues that the existing system is fundamentally flawed, and that there is a need for radical reform. The key conclusion from the analysis is that there would be significant gains from a reform that moved the system towards taxing profit in the country in which a business made its sales to third parties. That conclusion informs two proposals that are put forward in detail and evaluated: the Residual Profit Allocation by Income (RPAI) and the Destination-based Cash Flow Tax (DBCFT). The book is authored by group of economists and lawyers—the Oxford International Tax Group, chaired by Michael P. Devereux. It draws insights from both economics and law—including economic theory, empirical evidence on the impact of taxes, and an examination of practical issues of implementation—to assess the existing system and to consider fundamental reforms. This book will be useful to tax policy makers, tax professionals, academics, and anyone interested in tax policy.
Author | : Aqib Aslam |
Publisher | : International Monetary Fund |
Total Pages | : 50 |
Release | : 2021-06-08 |
Genre | : Business & Economics |
ISBN | : 1513561073 |
Download A Firm Lower Bound: Characteristics and Impact of Corporate Minimum Taxation Book in PDF, ePub and Kindle
This paper examines the role of minimum taxes and attempts to quantify their impact on economic activity. Minimum taxes can be effective at shoring up the corporate tax base and enhancing the perceived equity of the tax system, potentially motivating broader taxpayer compliance. Where political and administrative constraints prevent reforms to the standard corporate income tax, a minimum tax can help mitigate base erosion from excessive tax incentives and avoidance. Using a new panel dataset that catalogues changes in minimum tax regimes over time around the world, firm-level analysis suggests that the introduction or reform of a minimum tax is associated with an increase in the average effective tax rate of just over 1.5 percentage points with respect to turnover and of around 10 percent with respect to operating income. Minimum taxes based on modified corporate income lead to the largest increases in effective tax rates, followed by those based on assets and turnover.
Author | : Shafik Hebous |
Publisher | : International Monetary Fund |
Total Pages | : 26 |
Release | : 2018-11-08 |
Genre | : Business & Economics |
ISBN | : 1484381904 |
Download A Destination-Based Allowance for Corporate Equity Book in PDF, ePub and Kindle
Following renewed academic and policy interest in the destination-based principle for taxing profits—particularly through a destination-based cash flow tax (DBCFT)—this paper studies other forms of efficient destination-based taxes. Specifically, it analyzes the Destination-Based Allowance for Corporate Equity (DBACE) and Allowance for Corporate Capital (DBACC). It describes adjustments that are required to turn an origin into a destination-based versions of these taxes. These include adjustments to capital and equity, which are additional to the border adjustments needed under a DBCFT. The paper finds that the DBACC and DBACE reduce profit shifting and tax competition, but cannot fully eliminate them, with the DBACE more sensitve than the DBACC. Overall, given the potential major political cost of switching from an origin to a destination-based tax system, we conclude that advantages of the DBCFT are likely to outweigh the transitional advantages of the DBACE/DBACC.
Author | : Ms. Giorgia Albertin |
Publisher | : International Monetary Fund |
Total Pages | : 73 |
Release | : 2021-09-28 |
Genre | : Business & Economics |
ISBN | : 1513594362 |
Download Tax Avoidance in Sub-Saharan Africa’s Mining Sector Book in PDF, ePub and Kindle
This paper aims to contribute to the international policy debate around profit shifting, tax avoidance and SSA’s revenue mobilization efforts in three ways. First, it examines the importance of mining, the role of multinational enterprises (MNEs), and mining revenue outcomes in SSA. Second, it assesses the magnitude of profit shifting in mining drawing on new macro level research, supplemented by case studies to illustrate the lived experience of tax avoidance in SSA mining. Third, the paper identifies tax policy reforms that could boost revenue mobilization in SSA.
Author | : Ms. Alpa Shah |
Publisher | : International Monetary Fund |
Total Pages | : 36 |
Release | : 2021-10-18 |
Genre | : Business & Economics |
ISBN | : 1513599666 |
Download Natural Resource Taxation in Mexico: Some Considerations Book in PDF, ePub and Kindle
Mexico has large extractive industries and it traditionally has raised sizable fiscal revenues from the oil and gas sector. A confluence of factors—elevated commodity prices, financial challenges of the state-owned oil company Pemex, and revenue needs for financing social and public investment spending over the medium term—suggest that a review of Mexico’s taxation regimes for natural resources would be opportune, against the backdrop of a comprehensive approach to tackling Mexico’s challenges. This paper identifies opportunities for redesigning mining taxation to increase somewhat the revenue intake while maintaining the favorable investment profile of the sector. It also discusses recent reforms to the oil and gas fiscal regime and future reform considerations, with attention to the attractiveness of investment on commercial terms—an issue that should be placed in the context of an overall reform of Pemex’s business strategy and possibly of the energy sector more generally.
Author | : International Monetary Fund. Fiscal Affairs Dept. |
Publisher | : International Monetary Fund |
Total Pages | : 82 |
Release | : 2012-08-16 |
Genre | : Business & Economics |
ISBN | : 1498340067 |
Download Fiscal Regimes for Extractive Industries—Design and Implementation Book in PDF, ePub and Kindle
Better designed and implemented fiscal regimes for oil, gas, and mining can make a substantial contribution to the revenue needs of many developing countries while ensuring an attractive return for investors, according to a new policy paper from the International Monetary Fund. Revenues from extractive industries (EIs) have major macroeconomic implications. The EIs account for over half of government revenues in many petroleum-rich countries, and for over 20 percent in mining countries. About one-third of IMF member countries find (or could find) resource revenues “macro-critical” – especially with large numbers of recent new discoveries and planned oil, gas, and mining developments. IMF policy advice and technical assistance in the field has massively expanded in recent years – driven by demand from member countries and supported by increased donor finance. The paper sets out the analytical framework underpinning, and key elements of, the country-specific advice given. Also available in Arabic: ????? ??????? ?????? ???????? ???????????: ??????? ???????? Also available in French: Régimes fiscaux des industries extractives: conception et application Also available in Spanish: Regímenes fiscales de las industrias extractivas: Diseño y aplicación
Author | : Ms.Thornton Matheson |
Publisher | : International Monetary Fund |
Total Pages | : 42 |
Release | : 2017-11-15 |
Genre | : Business & Economics |
ISBN | : 1484324986 |
Download Taxing Telecommunications in Developing Countries Book in PDF, ePub and Kindle
Developing countries apply numerous sector-specific taxes to telecommunications, whose buoyant revenues and formal enterprises provide a convenient “tax handle”. This paper explores whether there is an economic rationale for sector-specific taxes on telecommunications and, if so, what form they should take to balance the competing goals of promoting connectivity and mobilizing revenues. A survey of the literature finds that limited telecoms competition likely creates rents that could efficiently be taxed. We propose a “pecking order” of sector-specific taxes that could be levied in addition to standard income and value-added taxes, based on capturing rents and minimizing distortions. Taxes that target possible economic rents or profits are preferable, but their administrative challenges may necessitate reliance on service excises at the cost of higher consumer prices and lower connectivity. Taxes on capital inputs and consumer access, which distort production and restrict network access, should be avoided; so should tax incentives, which are not needed to attract foreign capital to tap a local market.
Author | : World Bank |
Publisher | : World Bank Publications |
Total Pages | : 241 |
Release | : 2019-11-21 |
Genre | : Business & Economics |
ISBN | : 1464814414 |
Download Doing Business 2020 Book in PDF, ePub and Kindle
Seventeen in a series of annual reports comparing business regulation in 190 economies, Doing Business 2020 measures aspects of regulation affecting 10 areas of everyday business activity.