Meaningful Corporate Tax Residence

10 Pages Posted: 1 Aug 2013

See all articles by Omri Y. Marian

Omri Y. Marian

University of California, Irvine School of Law

Date Written: July 29, 2013


Tax avoidance strategies of well-known U.S. multinationals such as Apple Inc., Microsoft Corp., and Hewlett-Packard Co. have received much attention recently. Multinationals' use of foreign shell entities to shift income away from the United States is subject to scrutiny. The debate is primarily about the sourcing of income, not about the tax residence of the corporate entities involved. That is hardly surprising, because many view the tax residence of corporations as meaningless. That meaninglessness is occasionally cited to support the adoption of a territorial system of taxation, in which residence is arguably less relevant for tax outcomes.

This report summarizes some conclusions from a forthcoming Boston College Law Review article in which Marian recommends a fresh look at corporate tax residence. Marian argues that the perception of meaninglessness is a result of misguided normative discussion and that it cannot be avoided by adopting a territorial system. In his report, Marian develops a functional model under which corporate tax residence tests are designed to support the policy purposes of corporate taxation, and the tests are not independently justified in normative terms. A functional approach suggests that the United States should adopt a corporate tax residence test under which domestic corporations for tax purposes are corporations whose securities are listed for public trading in the United States, or whose place of central management and control is in the United States.

Keywords: International Tax, Corporate Tax, Tax Jurisdiction, Tax Residence

JEL Classification: E62, H2, K34

Suggested Citation

Marian, Omri Y., Meaningful Corporate Tax Residence (July 29, 2013). Tax Notes, Vol. 140, No. 5, 2013, Available at SSRN:

Omri Y. Marian (Contact Author)

University of California, Irvine School of Law ( email )

401 E. Peltason Dr.
Ste. 1000
Irvine, CA 92697-1000
United States

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