UNCTAD investment report suggests “radical solutions” on tax including Unitary taxation

The UNCTAD 2013 World Investment Report was launched in June of 2013, and seems to have received rather limited coverage at the time. The report includes multiple references to offshore centres, shell companies and transfer pricing; over the next couple of days I’ll be selecting relevant quotes and posting them here. Today’s quote on unitary taxation, in particular, does not seem to have been picked up widely. Apologies in advance for any cross-posting. 

From the Policy considerations section in Chapter 1:

“…moves to combat tax avoidance through OFCs [Offshore Financial Centers] and SPEs [Special Purpose Entities] must go hand in hand with a discussion of corporate tax rate differentials between countries…”

“Such a discussion could also include transfer pricing mechanisms beyond OFCs and SPEs, including radical solutions to distribute tax revenues fairly across the operations of TNCs [Transnational corporations] based on real value added produced (e.g. based on a formula including sales, assets and employees, in a unitary approach).” (pg 18 – bold added).

For more information on unitary taxation please see this recent submission by civil society organizations to the OECD and this Tax Justice Network page on transfer pricing.

The full UNCTAD World Investment Report 2013 is available here (pdf). UNCTAD (which stands for United Nations Conference on Trade and Development) has been praised for supporting a “fairer, more sustainable world economy” but is also at risk of being undermined by developed countries for challenging economic orthodoxy.