unitary tax

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Unitary Tax

A corporate tax on a corporation's global income. Some countries levy unitary taxes on corporations operating in their borders in order to prevent them from avoiding taxes by transferring income to another country with a low or no corporate tax. See also: Transfer pricing mechanisms, Aggressive accounting.

unitary tax

A state corporate income tax on worldwide income. Although they are unpopular with corporations, unitary taxes are instituted by governments to foil firms that use creative accounting techniques to transfer their income to states or countries with low income-tax rates.
References in periodicals archive ?
The idea was sketched out at length in a 2004 report by UN bureaucrat Andrew Mold entitled "A proposal for unitary taxes on the profits of transnational corporations.
The more specific effects of unitary taxes on sales, labor, and capital are reported in the regression coefficients (shaded area, rows 2-9).
However, having a mix of both systems appears to be the worst case, unless nonunitary accounting states have much higher tax rates than unitary states, because while unitary taxes in two states cancel each other out if of the same magnitude, a nonunitary accounting tax system in one state does little to mitigate the distortions caused by unitary taxation in another state (especially on the choice of degree of manufacturing centralization, [phi]).