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 ?
While unitary taxation is technically feasible and may be the best long-term solution to taxing multinationals, the fierce political opposition means that it is not likely to happen in the near term.
Hall said the WHO was looking forward to January 2017, when unitary taxation on tobacco products will take effect.
In the tax case, see, for example, the OECD's opposition to unitary taxation with formulary apportionment.
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.
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.
The effect of the income tax burden on property is more pronounced for states mandating unitary taxation or the throwback rule.
The encyclopedia is a handy guide, especially for those who are unfamiliar with or unclear about such federalism-relevant concepts as fiscal disparities, fiscal equalization, state gaming taxation, horizontal equity, median voter theorem, tax and revenue capacity and effort, tax competition, tax exportation, unitary taxation, and vertical equity.
Hocking offers three studies of diplomatic negotiations to support his basic argument: the United States-Canada free trade negotiations, the United States-United Kingdom dispute regarding the unitary taxation policies of several of the American states, especially California, and the United States-Canada negotiations over acid rain.
NY, however, traditionally has viewed itself as having a "limited" form of unitary taxation.
He was also staff director of the Working Group on Worldwide Unitary Taxation appointed by Treasury secretary Donald Regan at Reagan's request.