The FT has promoted the unitary model of taxation this week that I and others in the Tax Justice Network have long promoted. This allocates group profit to countries using a formula based on where the destination of sales is, where people are employed and where real physical assets are. These are the real and only drivers of economic value. This reform is now essential if we are to demand that global capital is to be accountable locally for tax.
And we must have country by country reporting in accounting as well. We have to know where corporations are and what they do, and how much tax they pay in each and every country in which they trade. Nothing else will also hold companies to account – and force them to change their behaviour under the glare of pubic, investor and regulator (including tax inspector) scrutiny.
If you have unitary taxation then you don\’t need country by country reporting of profit. For you\’re not going to be using country by country profit to allocate taxation, are you?