unitary taxation

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 taxation

a system of TAXATION operated by a country that taxes a foreign-owned MULTINATIONAL ENTERPRISE on a predetermined proportion of its total worldwide income, rather than on the income which the multinational actually earned within that country. This involves the use of some rule of thumb to apportion tax liability: for example, if 10% of the total world ASSETS of a multinational are located in that country, then the country may seek to tax 10% of the multinational's world income, making no allowance for any foreign taxes paid. Countries might adopt unitary taxation to increase their taxation revenues and to counter manipulative TRANSFER PRICING by multinationals, but must bear in mind that such a taxation system is likely to discourage inward INVESTMENT. Compare DOUBLE TAXATION.

unitary taxation

a system of TAXATION operated by a country that taxes a foreign-owned MULTINATIONAL COMPANY on a proportion of its total world-wide income rather than on the income that the multinational actually earned within that country. Countries might adopt unitary taxation to increase their taxation revenues and to counter manipulative TRANSFER PRICING by multinationals. See DOUBLE TAXATION.
References in periodicals archive ?
The minimum requirement of justice is to devise global rules that ensure that national tax systems remain capable of implementing distributive justice as they see fit Finally the article presents and discusses a concrete proposal for the global governance of business tax competition, namely, unitary taxation with formula apportionment Keywords: tax, global taxation, global governance.
Specifically, I outline a policy proposal to address the problem of business tax competition; namely, unitary taxation with formula apportionment (UT+FA).
The results for the related hearings were transmitted to President Reagan on July 31, 1984, in the Chairman's Report On The Worldwide Unitary Taxation Working Group: Activities, Issues and Recommendations.
Bertino has more than 20 years of experience in state income tax issues, including multistate income franchise taxes, jurisdiction to tax, tax base, apportionment of income, unitary taxation, business/non-business income, state filing options and federal and state income tax incentives.
These changes include nexus defined for MBT purposes, unitary taxation under the MBT, small business provisions, the MBT surcharge, and an MBT credits update.
A number of states have implemented unitary taxation in which, the firm is taxed on a worldwide taxation system.
He was also staff director of the Working Group on Worldwide Unitary Taxation appointed by Treasury secretary Donald Regan at Reagan's request.
As a general rule, California utilizes the worldwide method of unitary taxation, under which all the worldwide activities (i.
Government will now undoubtedly maintain its right to retaliate, but we're not expecting it to launch immediate broadsides; mind you, its guns may not remain spiked for long if other states move towards unitary taxation.
Over the years he has become well known for his defense of federalism, worldwide unitary taxation, and a two-factor business income test.
In yet another instance, eight excellent state tax services are accessible for material on unitary taxation.