unitary taxation

'unitary taxation' can also refer to...


More Like This

Show all results sharing this subject:

  • Economics


Show Summary Details

Quick Reference

A system of taxing firms operating in several countries on the basis of a country's share in their total operations. If taxation of a multinational firm operating in a country is based purely on its profits made in that country, tax can be avoided by accounting procedures. Measures to shift apparent profits out of the country include transfer pricing, that is, overvaluing purchases by branches of the firm from its branches in other countries, or undervaluing sales to them. Under unitary taxation a multinational firm is taxed on the basis of its worldwide profits multiplied by some measure of the proportion of its operations carried out in a country; such a measure could be employment or turnover. The adoption of unitary taxation would require changes in double taxation agreements.

Subjects: Economics.

Reference entries

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.