Corporate Income Taxes under Pressure: Why Reform Is Needed and How It Could Be Designed

Books, February 26, 2021

Source details

Canonical URL

Corporate Income Taxes under Pressure: Why Reform Is Needed and How It Could Be Designed

Other formats

• Markdown version
• Structured JSON version
• Bundle manifest

Bibliographic details

• Authors: Ruud A. de Mooij, Alexander D Klemm, Victoria J Perry
• Published: February 26, 2021
• Series: Books
• DOI: https://doi.org/10.5089/9781513511771.071

Summary

• Describes difficulties of the current international corporate income tax system.
• Traces origins of the system and how developments—such as the growth of multinational enterprises and digitalization—created fundamental problems not foreseen at inception.
• Identifies tax competition (governments using low tax rates or incentives to attract tax bases) and profit shifting (companies reporting profits in jurisdictions with lower tax rates) as central challenges.
• Reviews solutions including both evolutionary changes to the current system and fundamental reform options.
• Covers reform efforts already under way (for example under the Inclusive Framework at the OECD) and potential radical reform ideas developed by academics.

Major problems identified

• Tax competition: governments attempt to attract tax bases through low tax rates or incentives.
• Profit shifting: multinational enterprises avoid tax by reporting profits in jurisdictions with lower tax rates.
• Digitalization: the digital economy creates allocation and nexus issues not anticipated by the original system.

Solutions and policy options discussed

• Evolutionary changes to the existing international corporate tax framework.
• Fundamental reform options, including radical academic proposals.
• Examination of ongoing reform efforts under the Inclusive Framework at the OECD alongside alternative reform ideas.

Subject coverage and keywords

• Subject: Balance of payments, National accounts, Taxes
• Keywords: Corporate income tax, Corporate taxes, digitalization, Double taxation, Europe, Foreign direct investment, Global, Income, international cooperation, multinational enterprise, multinationals, passive income, Profit shifting, Sub-Saharan Africa, tax avoidance, tax competition, tax reform, tax treaty

Publication metadata (from page)

• Authors: Ruud A. de Mooij, Alexander D Klemm, Victoria J Perry
• Publication date: February 26, 2021
• Pages: 388
• ISBN: 9781513511771
• DOI: https://doi.org/10.5089/9781513511771.071

Source: https://www.imf.org/en/publications/books/issues/2021/03/01/corporate-income-taxes-under-pressure-why-reform-is-needed-and-how-it-could-be-designed-48604