Taxing Book Profits: New Proposals & 40 Years of Critiques

Abstract

This paper considers recent domestic and international proposals to utilize financial statement earnings as the basis for imposing additional or minimum taxes on corporate income and to reallocate corporate profits among jurisdictions. It reviews prior research undertaken in the context of previous proposals to partially substitute financial accounts for taxable income and considers how valid critiques of prior proposals are with respect to current initiatives. It concludes by noting that the concerns raised about earlier proposals have neither been fully considered nor addressed in the recent initiatives.

Keywords: Minimum Tax, Excess Profits, OECD, GAAP, IFRS

JEL Classification: H25, F55, M48