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Unitary Taxation Explorer
Country-level estimates for all scenarios modelled in the report — pick a country, a formula, and the design choices, and see who gains what.
About
With a UN Framework Convention on International Tax Cooperation in sight, the world faces a decision that could fundamentally reshape corporate taxation. This report, written with Alex Cobham for the Tax Justice Network and Public Services International (PSI), estimates what is at stake: moving from the 100-year-old “pay where you say” approach – under which multinationals are taxed where they declare their profits – to a “pay where you play” approach that taxes them where they actually employ workers, hold assets, and make and sell their goods and services. In technical terms: from the arm’s length principle to unitary taxation with formulary apportionment.
We find that countries altogether would collect around US$500 billion more in corporate tax each year – 24% more from multinational corporations – without raising tax rates. Almost every country gains. Beyond the headline number, the report examines the design choices that determine how the gains are shared: treating resource rights as prior to taxing rights (without which low-income countries gain 35% less), measuring sales at destination rather than origin (which raises low-income countries’ gains by more than 40%), the choice of apportionment formula, and the effect of cross-border loss consolidation. It also shows that the small number of likely losers – corporate tax havens and “headquarters-bias” countries – could preserve their current revenues simply by applying ordinary tax rates to the smaller profit base they would keep.
The methodology note documents the data and estimation approach in detail, and all code and non-confidential data are available in the replication package.