The Deceptive Allure of Taxing “Residual Profits”

Journal
Shay, S.E.
International; OECD
Bulletin for International Taxation 2021 (Volume 75), No. 11/12
Format/Price
JournalUSD 45

This article outlines the traditional justifications for a residual profits business tax base and evaluates its role in the OECD/G20 Pillar One proposal to allocate income to market countries. The article concludes that basing the allocation of profits to market countries on multinationals’ residual profits would be inferior to allocating a portion of total corporate profits.