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Designing and Implementing a Destination-Based Corporate Tax

By Michael P. Devereux and Rita de la Feria

The authors argue that the current international tax system based upon the principles of source and residence is no longer suited to a globalised world economy, and the fundamentals of the international tax system need to be re-examined. They propose an R+F based cash-flow tax based on the principle of destination as a suitable alternative to taxing corporations in an international setting. The paper’s aim is to discuss the legal and practical issues which would arise in the implementation of such a tax, namely how a destination-based tax could be effectively designed and implemented. For this purpose the authors draw on experiences with designing VAT systems worldwide. It is proposed that the destination principle should be implemented through use of the customers’ location as the main legal proxy.

How Europe’s ‘Digital Tax’ Plans Will Hit U.S. Tech Companies

By William Horobin and Aoife White

Big internet companies have long been the target of complaints that they don’t pay enough in taxes. Fed up, France imposed a 3% levy on the digital revenue of companies that make their sales primarily in cyberspace, such as Facebook Inc. and Alphabet Inc.’s Google. Other countries also are targeting companies, most of which are American, that have multinational earnings that often escape the taxman’s grip. The U.S. isn’t taking this sitting down.

U.S. Proposes Duties on $2.4 Billion of French Goods Over Tech Tax

By William Horobin, Jenny Leonard, and Laura Davison

The U.S. proposed tariffs on roughly $2.4 billion in French products, in response to a tax on digital revenues that hits large American tech companies including Google, Apple Inc., Facebook Inc. and Amazon.com Inc.