Unitary Taxation and International Tax Rules
Reuven S. Avi-Yonah
University of Michigan Law School
Zachee Pouga Tinhaga
University of Michigan at Ann Arbor - Law School - SJD Candidate
November 8, 2013
U of Michigan Public Law Research Paper No. 369
U of Michigan Law & Econ Research Paper No. 13-020
Any proposal to adopt Unitary Taxation (UT) of multinationals has to contend with whether such taxation is compatible with existing international tax rules and in particular with the bilateral tax treaty network. Indeed, some researchers have argued that the separate accounting (SA) method and the arm’s length standard are so embodied in the treaties that they form part of customary international law and are binding even in the absence of a treaty. In this paper we will argue that UT can be compatible with most of the existing tax treaties, and that developing countries in particular can implement it in most cases with or without a tax treaty.
Number of Pages in PDF File: 35
Keywords: unitary taxation, tax treaties
JEL Classification: H26
Date posted: November 8, 2013 ; Last revised: December 18, 2013
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