Taxing Profit in a Global Economy

Taxing Profit in a Global Economy 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. A 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.

• Written by a group of leading academics and practitioners from law and economics, addressing fundamental issues of principle and practice in the taxation of business profit and the allocation of taxing rights over such profit among countries
• Evaluates the existing regime and commonly discussed reform options
• Develops and evaluates two further reform options following the prescriptions derived from first principles