Research Phase 12 The future of taxing multinationals
Do domestic companies pay more tax in the UK than multinationals?
Katarzyna Habu (Oxford University)
There has been an increasing effort in research to identify the scale of base erosion and profit shifting (BEPS). The availability of
confidential UK tax return data opens up the possibility of investigating a new channel to explore this question. It is possible to match
unconsolidated UK tax returns data with equivalent information from financial statements. This permits a comparison in the tax
position between different types of companies, and an analysis of whether there are systematic differences in effective tax rates
between types of company. One distinction is between foreign multinationals and domestic companies operating in the UK; this paper
uses a matching approach to identify differences in tax payments between these groups.
New Players, New Game: The role of the public and political debate in the development of action on international tax issues
Maya Forstater (Center for Global Development) and Rasmus C. Christensen (Copenhagen Business School)
The last few years have seen an enormous rise in public concern and dissatisfaction with the taxation of multinational companies
(MNCs). In the wake of the financial crisis, public and political interest in corporate taxation rose significantly, with debt-challenged
states looking to shore up national fiscal systems, and attention focused on corporate tax practices deemed overly aggressive or
immoral. International tax rules as a matter of ‘front page’ public debate is an unusual situation; while taxation itself is always and
everywhere a political topic, the fine workings of international taxation has largely been the domain of technical debates between
experts.
This is no longer the case: issues such as tax havens, transfer pricing, and structures like the “Double Irish Dutch Sandwich” have
become topics of popular debates and campaigns. These issues have gone from being solely the subject of technical expert debates
to being topics of public interest and popular media reporting. In consequence, new political initiatives have also progressed at an
unexpectedly high pace.
How has this rapid and unexpected change come about? Existing accounts of international tax change have emphasised the role
played by international state relations, International Organisations’ standard-setting, the influence of transnational elites or the role of
leaks in driving lawmaking. These analyses have often emphasised formal policymaking processes. Some accounts have zoomed in
on the role of activists, in particular the Tax Justice Network, analysing the tactics and strategy of individual ‘outsider’ organisations in
changing public and policy debates. This paper offers a complementary narrative of the dynamics of international tax
change, looking at the role of various actors in shaping popular debates on international tax issues.
What will the OECD BEPS Indicators indicate?
Christoph Spengel, Jost Heckemeyer and Katharina Nicolay (University of Mannheim)
In OECD BEPS Action 11, a number of “indicators” were proposed which are intended to provide evidence of the scale of BEPS, and
the impact of the OECD proposals in reducing BEPS. These indicators are likely to be heavily used, even if they have significant
drawbacks. This paper analyses the indicators that the OECD will use, and explores what they may find.
Do domestic companies pay more tax in the UK than multinationals?
Katarzyna Habu (Oxford University)
There has been an increasing effort in research to identify the scale of base erosion and profit shifting (BEPS). The availability of
confidential UK tax return data opens up the possibility of investigating a new channel to explore this question. It is possible to match
unconsolidated UK tax returns data with equivalent information from financial statements. This permits a comparison in the tax
position between different types of companies, and an analysis of whether there are systematic differences in effective tax rates
between types of company. One distinction is between foreign multinationals and domestic companies operating in the UK; this paper
uses a matching approach to identify differences in tax payments between these groups.
New Players, New Game: The role of the public and political debate in the development of action on international tax issues
Maya Forstater (Center for Global Development) and Rasmus C. Christensen (Copenhagen Business School)
The last few years have seen an enormous rise in public concern and dissatisfaction with the taxation of multinational companies
(MNCs). In the wake of the financial crisis, public and political interest in corporate taxation rose significantly, with debt-challenged
states looking to shore up national fiscal systems, and attention focused on corporate tax practices deemed overly aggressive or
immoral. International tax rules as a matter of ‘front page’ public debate is an unusual situation; while taxation itself is always and
everywhere a political topic, the fine workings of international taxation has largely been the domain of technical debates between
experts.
This is no longer the case: issues such as tax havens, transfer pricing, and structures like the “Double Irish Dutch Sandwich” have
become topics of popular debates and campaigns. These issues have gone from being solely the subject of technical expert debates
to being topics of public interest and popular media reporting. In consequence, new political initiatives have also progressed at an
unexpectedly high pace.
How has this rapid and unexpected change come about? Existing accounts of international tax change have emphasised the role
played by international state relations, International Organisations’ standard-setting, the influence of transnational elites or the role of
leaks in driving lawmaking. These analyses have often emphasised formal policymaking processes. Some accounts have zoomed in
on the role of activists, in particular the Tax Justice Network, analysing the tactics and strategy of individual ‘outsider’ organisations in
changing public and policy debates. This paper offers a complementary narrative of the dynamics of international tax
change, looking at the role of various actors in shaping popular debates on international tax issues.
What will the OECD BEPS Indicators indicate?
Christoph Spengel, Jost Heckemeyer and Katharina Nicolay (University of Mannheim)
In OECD BEPS Action 11, a number of “indicators” were proposed which are intended to provide evidence of the scale of BEPS, and
the impact of the OECD proposals in reducing BEPS. These indicators are likely to be heavily used, even if they have significant
drawbacks. This paper analyses the indicators that the OECD will use, and explores what they may find.
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