Making the Case for ‘Digital Taxation’: Into the Kingdom of Tech Giants – international tax avoidance and the modern digital economy

Buy Soma Watson Overnight Current international tax law and its underlying principles are no longer grounded in the reality of today’s economics, digital business models and the global economy, undermining common sense and promoting widespread corporate tax avoidance. The result? Countries across the world compromised in their ability to fund the public goods of modern societies, and their citizens (and future generations) saddled with problems not of their own making: from shaky finances to pinched infrastructure and social safety net to loss of trust in meritocracy, our leaders and our institutions.

https://manabernardes.com/2024/08drb4iz4gt The international corporate tax system has not kept pace with the spread of the digital economy and the evolution of today’s multinational enterprises, their operational models, and the complex cross-border arrangements and practices their executive leadership teams and Boards have implemented to avoid taxes across the world. This is particularly true in respect to the giant internet based tech multinationals such as Amazon, Facebook, Apple, and Google and their digital business models that now dominate the world economy.[1] 

https://serenityspaonline.com/w209qrv Once a leadership philosophy and corporate culture of not paying taxes is established it is very hard to change. Not surprisingly, multinational tech giants are making headlines across the globe as billions of dollars of corporate revenues and/or profits are artificially reduced and shifted from the countries where the real and substantial economic activity is taking place to ‘tax haven’ countries with little or no economic nexus (i.e. low or no-tax jurisdictions). This is the minefield fueling public anger, the glaring disconnect between the enormous revenues and profits reaped by multinationals and the tech giants from a particular country and the taxes paid within that country (or more accurately, not paid).[2]

Buy Diazepam Next Day Delivery Uk Amazon appears to have built their profit maximization strategy around avoiding taxes at various levels. … it uses its low-profit strategy to decimate competitors and swallow up industries …. Exploiting tax loopholes is one of Amazon’s most important long-term strategies.


– Alex Shephard, The New Republic[3]

https://www.ngoc.org.uk/uncategorized/future-events/6b75dqp1 In the modern digital economy the shortcomings of the international tax rules are many, but the most significant challenge (and the most archaic rule) is that the taxing right of a country may only arise when a business has a permanent establishment (“PE”) within that jurisdiction – which currently is restricted to mean an actual physical presence (i.e. a fixed place of business) is required within the country to create a taxable nexus. Only where there is this type of nexus does a company become a “taxable presence” within a particular country. This “taxable presence” framework for taxing corporate profits means that companies physically based in one country are generally only taxed in another if they have a physical presence there. As this ‘taxable presence’ concept was implemented before the advent of the digital economy (and with a more traditional ‘bricks-and-mortar’ business model in mind), today’s multinationals and tech giants have targeted and undermined the purpose and spirit of this particular tax rule by intentionally structuring their business and operations[4] to artificially avoid or reduce its PE taxable physical presence status in countries across the world – but still profit from these ‘market’ countries by maintaining a “significant economic presence” through its digital business model and digital presence.

Buy Valium 5Mg Online Amazon, Google, Apple and Facebook are among those who have consistently exploited a lack of physical offices in countries of operations to book low taxes.


– Neha Gupta[5]

https://gungrove.com/ak88qkh9hu It is fair to say that in today’s digital economy – where value creation is largely decentralized and decoupled from a ‘physical presence’ – this issue has reached alarming proportions. Multinational enterprises and tech giants are now obtaining significant revenues and profits from countries across the world through a ‘digital presence’ – with little to no ‘physical presence’ that was the norm for the business world in the 20th century – and purposely avoiding taxation by the designed shifting of profits out of these ‘market’ countries (i.e. UK, France, Germany, Australia, Canada, etc.) and into a designated low or no-tax jurisdiction[6]:[7]

http://www.wowogallery.com/m23r0kj “Nowadays it is possible to be heavily involved in the economic life of another country, e.g. by doing business with customers located in that country via the internet, without having a taxable presence therein (such as substantial physical presence or a dependent agent). In an era where non-resident taxpayers [i.e. multinational enterprises] can derive substantial profits from transactions with customers located in another country, questions are being raised as to whether the current rules ensure a fair allocation of taxing rights on business profits, especially where the profits from such transactions go untaxed anywhere.”

https://equinlab.com/2024/01/18/k8u8zitaf And the issue is not just limited to the multinational tech giants. As the digital economy is increasingly becoming the economy itself[8] – and every business today is a digital business[9] to some extent – it should not be a surprise that more and more corporate business models are exploiting the situation such that the scale of cross-border business activity is increasing, but with a reduced physical presence as core functions are spread across multiple jurisdictions and segregated from ‘customer market’ countries due to their high mobility. In this manner businesses can supply digital services in countries where they are strategically limiting in their physical presence (to reduce their taxable presence), but in fact access an increasing number of customers (i.e. ‘scale without mass’)[10] to maintain or increase their revenue, profits and economic presence.

https://mmopage.com/news/6crs8fzs In a marketplace that is increasingly digitised, borderless and globalised, current taxation rules and schemes are … incapable of dealing with the new digitised business models, from Amazon to Netflix to Facebook. … Business models have changed radically from the concept of businesses being tangible ‘bricks and mortar’ entities, but taxation models have not. https://mmopage.com/news/zhko41vwof1  


– EU Commission urges digital reform[11]

https://sieterevueltas.net/2om1konr44 The Organisation for Economic Co-operation and Development (OECD) – which includes such countries as the UK, Canada, the U.S., Australia, Germany, France, etc. – has acknowledged that the current tax rules for corporations are not fit for the digital economy, having intensified and emboldened corporate tax avoidance to the point that the loss of public revenues across the world[12] it is now estimated to exceed $500 billion annually.[13] The OECD has stated that nothing less than the international corporate tax system is at stake.[14]

As one would expect, the international taxation framework is generating considerable discussion, conflict and uncertainty as governments around the world publicly grapple with the challenge of adapting their 20th century revenue collection models to the 21st century digital economy and global market. 

The “uncomfortable question” for the policymakers and public officials across the world is whether billion dollar multinationals can be permitted to continue using a digital business model and their significant economic presence to reap the benefit of immense revenue and wealth from their societies “without paying any meaningful corporate taxes”.[15] If the answer is “no”, then the two big picture issues that will have to be addressed are:

  • (1) How to appropriately establish and protect taxing rights in countries where a multinational enterprise has a significant digital and economic presence but either a limited or no physical presence,[16] and 
  • (2) How “taxing rights on income generated from cross-border activities in the digital age should be allocated among countries”.[17] 

Buy Carisoprodol Canada Base erosion and profit shifting (BEPS) refers to tax avoidance by multinational enterprises (MNEs), which make use of gaps in the interaction of different tax systems to artificially reduce taxable income or to shift profits to low-tax jurisdictions in which little or no economic activity is performed. Curtailing BEPS and preserving countries’ tax bases has been a concern of the international community and national governments.


– Annet Wanyana Oguttu[18]

https://www.justoffbase.co.uk/uncategorized/oojml88d58 Overview

Buy Xanax India One cannot read international headlines today without touching on the ups and downs of a volatile global economy (i.e. globalization, technology, automation, trade), precarious employment and underemployment, and the growing disparity in wealth, income and opportunity.  As trust and confidence in our institutions has eroded,[19] the International Monetary Fund and the OECD have noted that too many people in Western societies feel left behind by globalization and technological change.[20]

This broad perception is unquestionably rooted in fact: “big slices of society, in big chunks of the developed world, have seen real wages stagnate even as returns rapidly escalated in a small number of pockets. Ultimately this creates both growing inequality in wealth and income and — perhaps more troubling — a sense that gaps in opportunity have widened”.[21]

https://fireheartmusic.com/jfo0e1bz0fn And we are left trying to make sense of what appears to be a new world and a system that is broken.  At this time in history it may well be proven correct that the “veracity and very survival of democracy depends on a strong” middle and working class “that is able to hold government accountable”. The link between income and stable democracies “is, at a certain level, intuitive. After all, at the heart of democracy is an economic contract between citizens who consent to pay taxes and a government that, in exchange”, ensures a fair system of taxation and safeguards the security and welfare of the nation by providing public goods such as education, healthcare, infrastructure, a social safety net, appropriate deficit reduction, and emergency services and national security. “In essence, any economic challenge that threatens the middle and working class places this contract – and ultimately, democracy – in peril”.[22]

In this environment, corporate tax avoidance by multinational enterprises – and the tech giants in particular – constitute a serious risk to all countries across the world as they (a) adversely impact tax revenues, tax sovereignty, and tax fairness, (b) undermine public services, (c) exacerbate income and wealth inequality, and (d) hollow out support for democratic institutions that depend, to varying degrees, on the promise of ‘social and economic’ equality – or at least the genuine equality of opportunity.[23] From the EU and the UK to Canada and from Asia to Australia, countries and their societies are being adversely reshaped toward an unsustainable future by this intentional tax avoidance and offshoring of the world’s wealth.

https://www.prehistoricsoul.com/plpsz81poif [W]hat do we do about the corporations that are driving huge social and economic change, but have so far proved reluctant to pay anything approaching their fair share of tax? From that follows the second, even graver conundrum: if things stay as they are, what could happen to just about everything that depends on government funding?


– John Harris[24]

Buy Cheap Xanax From India Across the world multinational enterprises – in particular multinational tech giants – have actively worked to ensure they do not pay their fair share of tax in the jurisdictions in which they operate and profit (and where their end-users interact with their platforms). Although no institution is immune from the annual tax deadline, most multinational enterprises aim to reduce or avoid corporate taxation as much as possible through a number of international techniques, including profit shifting schemes and tax havens. Researchers estimate that over $500 billion is lost every year due to tax avoidance by multinational corporations, with the International Monetary Fund’s findings supporting global revenue losses of over $650 billion annually.[25] To put this in perspective, it has been suggested that for each $10 billion in tax revenue lost is approximately equivalent to the income taxes from two million average households.[26]  And, these figures may be conservative in light of the wide range of evidence of aggressive corporate tax avoidance – including tax evasion – emerging from the world’s developed economies:[27]

“It is very clear from international evidence gathered through the OECD’s Base Erosion and Profit Shifting (BEPS) process – [tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially reduce taxable income or shift profits to low or no-tax jurisdictions] – that some foreign-owned companies, in the words of the Australian tax commissioner, are ‘overly aggressive in the way they structure their operations’.”

The Economist suggests that close to 40% of multinational profits are shifted to low-tax countries each year,[28] and recent events suggest that the digital economy and its multinational tech giants are today’s worst examples of big-business tax avoidance. These tech corporations are reportedly depriving countries around the world of trillions of dollars in tax revenues by harboring their profits and intangible capital in havens such as Ireland (i.e. Facebook, Apple, Google) and Luxembourg (i.e. Amazon).[29] Amazon, for example, structured all of its digital sales in countries across the EU as sales from Luxembourg such that its profits were tax-free.  In respect to Google, in addition to sheltering billions in an overseas tax haven for decades, it has also referenced a strategy that as its high-tech was invented in the U.S., all digital sales in every country in the world are U.S. sourced income and therefore not taxable in the countries in which its customers are actually located and where the revenue is actually generated (and, as an added bonus, these monies are not taxed in the U.S. unless brought back into the country – and the executive leadership of these multinational enterprises have been clear this will not happen until the U.S. government passes favourable minimum tax rates on their overseas profits – note: which recently took place under a new U.S. tax bill passed in December 2017).[30]

[I]magine Apple using various forms of accounting chicanery to claim that tens of billions of its profits generated in countries with normal corporate tax rates were actually all made in Ireland, where Apple had negotiated a special 2 percent tax rate for itself. (Apple has on occasion gone even further, asserting that some of its profits were made, for the purposes of taxation, in no country at all).


– Jon Schwarz, Tax Havens and Other Dirty Tricks[31]

International corporate taxation is an important source of government revenue by countries across the world, and this important source of tax revenue is gaining prominence in the public consciousness as awareness grows of the relatively low amounts of tax paid by multinational enterprises.[32] There is a mounting recognition that tax avoidance by big tech corporations – these “citizens of nowhere” for tax purposes – is paving the way to historic levels of inequality and placing an increased tax burden on the citizens of these countries in which they have profited from, in particular the middle and working class and the poor (as the shortfall is required to be made up by levying higher taxes on other less wealthy sections of society). And these multinational enterprises and their executive leadership teams and Boards are not fiscal innocents.[33]

https://www.ngoc.org.uk/uncategorized/future-events/zugklxu These issues have lead to substantial concern and global tension, if not outright anger, about the fact that multinational enterprises appear to be “either gaming or outright cheating the tax system”,[34] taking intentional steps to artificially reduce taxable income or shift profits to low-tax jurisdictions in order to ensure that their fair share of taxes are not paid to the countries where they do business.[35] Public confidence in the fairness of taxation has been shaken by the significant evidence of considerable revenue losses due to corporate tax avoidance.[36]

Buy Diazepam 15 Mg The mounting controversy and cause for concern arises from two perspectives in the digital economy, one is political and the other policy. From a political perspective is the voter outrage “that any company can make so much [revenue and/or] profit in their country and pay so little tax on it”.[37] From a policy perspective it is the artificial segregation of taxable income by multinational enterprises from the very country in which their significant economic presence and activities (i.e. digital presence, sales revenue, users and customers, etc.) actually generated the revenues and profits.[38] Under both perspectives the controversy is initiated by multinational enterprises and tech giants coordinating their worldwide operations through a combination of tax avoidance strategies involving, among other things, digital business models and its taxable presence in a particular jurisdiction (i.e. manipulating the ‘permanent establishment’ rule and its restriction to a physical presence) and shifting revenues and/or profits from the countries in which they were created to low or no-tax jurisdictions (i.e. ‘transfer pricing’ rules):[39]

https://www.chat-quiberon.com/2024/01/18/g28w0fvd83 “More specifically in regard of eliminating or reducing tax in the market country [or source country], there are two main different scenarios, the first one is when the PE status cannot be avoided because of the physical presence or the nature of activity carried out, and the second when the taxable presence can be avoided using tax planning schemes.

https://gungrove.com/uqadeo4s3 When the physical presence creates taxation nexus for the source state, different strategies can be used to promote BEPS, such as shifting profits via internal trading structures and lowering net profit by maximizing deductions. However, the ultimate strategy used by [multinational enterprises and the digital giants] to achieve BEPS is to avoid a taxable presence in the market countries and consequently the incidence of source taxation. …

https://masterfacilitator.com/dicwwdzg3 The [tax avoidance] schemes can create artificial tax outcomes that are made possible due to the systematic misalignment between the place where the profits are taxed and where value is created. That means [multinational enterprises and the tech giants] can operate in different countries, interact with other markets simultaneously and earn substantial revenues without giving rise to a permanent establishment, and consequently tax liability, in the source jurisdiction. And the lack of taxation in the market country, is regarded to be a problematic issue, therefore solutions to address it are being proposed around the world.

Buy Alprazolam 2Mg Uk That being said, the main objective of the present work is to analyse the proposals for the implementation of a new solution for the digital economy taxation issues and promote a critical assessment of … a new PE nexus based [on a corporation’s] significant [economic presence, which would permit a taxable nexus for a country where there is physical presence or a] digital presence.”

Is Amazon too big to tax? The e-commerce giant paid zero federal taxes in 2017.


– Alex Shepard[40]

https://modaypadel.com/jbtxpvtx Why is this the case? Why are countries around the world – where the customers are located and the revenue is actually being generated – struggling with how to tax multinational enterprises and in particular the tech giants? The central problem with the current international tax rules involve two interrelated issues: (1) they largely fail to align tax rights with the actual countries where the real economic activities and value creation are located and taking place via digital presence (i.e. taxes are not paid in the countries where business is done and where profits are really made), and (2) they intensify aggressive tax avoidance schemes by multinationals on their worldwide revenues and profits (i.e. artificially reduce taxable income; shift profits to tax havens)[41]:[42]

https://serenityspaonline.com/k19coiud “[C]urrent tax rules were designed for the traditional economy [as opposed to the digital economy] and don’t fully capture [cross border on-line] activities based on data and intangible assets, such as intellectual property. This means traditional tax systems so far have failed to capture activities where value added tends to be virtual, rather than material. And digital companies have sought to take advantage of loopholes created by uncoordinated [international] regulation. These loopholes allowed tech companies to re-route profits to low-tax jurisdictions, such as Bermuda, which has no corporate income tax, or Ireland, which worked out the special deal with Apple.” 

https://mmopage.com/news/9ejanqs6w The tech giants have used (legal) tax tricks to pay minimal tax in the UK compared to revenue. Industry analysts told the Telegraph that Facebook generated nearly £2b in advertising revenue in 2017 but paid just £16m tax, and Google paid just £50m tax on £4.4b in revenue.


– Nick Miller, Sydney Morning Herald[43]

So – bearing in mind that many of these tech giants and multinational entities are larger economic entities than some of the countries in which they operate[44] – how can policymakers and government officials ensure these corporate entities pay their fair share of taxes? An effective long-term solution – that strengthens the integrity of the international corporate tax system as well as encourage buy-in nationally and across the global playing field – will have to address coherence of the corporate tax rules at the international level, realign the taxation of corporate income and/or profits with the location where the economic activities generating those revenues and profits occurred, and improve transparency[45] in respect to “comprehensive public country-by-country reporting for multinationals” (so that tax authorities can apply their country’s tax laws effectively).

The answer for the appropriate taxation of digital commerce across the world is an international taxation system that recognizes and ensures that multinationals (in particular the tech giants) are “taxed based on where they genuinely do business”.  This will require two points:

  • An updated taxable nexus based on “significant economic presence”: This would require extending the permanent establishment (“PE”) rule to be extended from simply a “physical presence” in a particular country to also include a “digital or virtual presence” as well (i.e. sales revenue, users, etc.). This would establish and protect taxing rights in a country where the multinational enterprise has a significant economic presence[46] (whether through a physical presence or a digital presence), and is an appropriate compromise and fair balance between the “country of residence” of the multinational enterprise and the right of the “market [or source] country” to have a fair share of taxes in respect to the revenues and business activities located in its jurisdiction.[47]
  • A move toward a unitary taxation system and formulary apportionment that addresses taxing rights and allocation:[48] A unitary system of taxation would treat a multinational enterprise – and its related group of companies located in countries around the world, including ‘tax havens’ – as a single economic entity that negates profit shifting, and would establish how taxing rights on income and/or profits generated from cross-border activities in the digital economy should be allocated among countries. Under formulary apportionment, a multinational enterprise would allocate its income and/or profits (generated from cross-border activities in the digital economy) across countries based on, for example, its sales, payroll, and capital base in each jurisdiction. The multinational would pay each country’s corporate tax on the share of its worldwide income and/or profits allocated to the particular country in question. Formulary apportionment would remove the current artificial incentive for multinationals to shift reported revenue, income and/or profits to low-tax countries. Tax liabilities, instead, would be allocated by a measure (or measures) of their real economic activity in each country. [49]

This type of solution for today’s digital economy – at least as a starting point for a strong foundation for the overall reformation of the current international taxation system – would ensure multinational enterprises and tech giants that utilize digital business models would be taxed in the countries where they genuinely do business and where the value is created, rather than the country they choose to artificially shift their profits. In particular, it would restore a balanced sharing of tax revenue among countries.

This type of policy also recognizes that although it may be easy for these tech corporations to artificially shift revenues, income and/or profits to another jurisdiction through various tax avoidance strategies and operating models, they cannot shift their actual customers from the countries in which they are digitally operating[50] and maintaining a significant economic presence:[51]

“Perhaps the most striking element of the OECD’s work on BEPS is the manner in which it articulates the root of the problem: the extent to which current tax laws permit members of multinational corporate groups to assign income to zero- or low-tax countries in which they conduct few if any business activities. In the words of an OECD report on BEPS and developing countries, base erosion results from ‘arrangements that achieve no or low taxation by shifting profits away from the jurisdictions where the activities creating those profits take place’. …

The language used by the OECD and G20 to describe the source of the BEPS problem evokes the central principle of [a unitary taxation system with] formulary apportionment: income should be attributed for tax purposes to the locations where business activities are performed. Because formulary apportionment can apportion income only to places where real business activity takes place, and in quantitative proportion to the extent of that activity, formulary apportionment would, if applied to a taxpayer’s income from all sources, eliminate BEPS completely. That is, under a fully-implemented formulary system, income could not simply be apportioned to countries where little, if any, economic activity is performed. At least in theory, therefore, formulary apportionment represents the most straightforward remedy for the BEPS problem.”

The fact that tech companies have been engaged in industrial scale tax avoidance has been well known for a long time. … Government must do much better to ensure that taxes on profits made in this country, are paid in this country. What is needed is a rethink by government and international bodies of how multinationals are taxed, and an acceptance that the current approach just isn’t working.


– George Turner, Director of Tax Watch UK[52]

Although the need for a digital tax evolution seems more pressing than ever, getting a global overhaul right will require a comprehensive and unified approach in respect to how digital transactions affect direct taxes (i.e. income tax, corporate tax) and indirect taxes (i.e. imports, excise duties, sales tax and value-added tax).  Due to years of resistance and political lobbying by these multinational enterprises and tech giants (and those jurisdictions enabling them),[53] interim measures for taxing digital transactions by individual countries – lead by countries such as the UK, France, Germany, Italy, Spain, Australia, South Korea, and India[54] –  may be required before a more extensive international approach to combat tax evasion across all industries – championed and coordinated by the OECD  –  is agreed to and in place[55]:[56]

“The OECD is seeking to minimize the negative effects that unilateral measures could provoke in international trade and capital movements. … [However, a temporary short-term] unilateral introduction of specific digital taxes or answers to the current system, is a good solution. This is so from a perspective of international justice, even if it is not the optimal solution from an economic perspective. …

The OECD does not recommend interim measures on digital taxation, but accepts an excise tax on e-services adopted unilaterally, if certain conditions are respected, namely as long as (1) it is not in conflict with international obligations (tax treaties, World Trade Organization, the EU and the European Economic Area) and (2) it is temporary; targeted; minimizes over-taxation; minimizes the impact on start-ups, business creation and small business; and minimizes cost and complexity.”

Despite the interest in the topic, the prospect of international agreement seems distant, and the status quo in the interim – to do nothing – does not appear to be a responsible position at this point in time. The reformation of the international taxation system means challenging powerful and wealthy corporate interests in an era of influential ‘big money’ politics. An interim short-term digital tax (based on a “digital presence”) imposed by countries may be an appropriate solution from a perspective of international justice,[57] as well as exerting pressure on international institutions and recalcitrant ‘enabling’ governments to move forward without delay on a long-term international solution.  

With the fullness of time, the sense of fundamental economic unfairness, lack of transparency, and genuine public anger may well explain in part why millions of voters across Western society – from the U.S. to the EU – have been voting for populist political parties, and why such unfortunate decisions as ‘Brexit’ have taken place to the inevitable detriment of the UK as a whole (ending over 40 years of membership in the EU[58]).[59]

Adam Smith said that taxes should be efficient, certain, convenient and fair. Against that standard, today’s tax policies are unforgivably cack-handed. Politicians rarely consider the purpose and scope of taxation. … Rewriting the codes means winning over sceptical voters and defying rapacious special interests. It is hard work. But the prize is well worth the fight. 


– The Economist[60]

https://therepairstore.ca/7fd5j6irx Corporate Influence on Domestic and International Governments – 21st-century politics awash in ‘Big Money’ and corporate lobbying

A progressive tax system that embraces the digital economy – and the digital business models of today’s multinationals and tech giants – is central to the capacity of nations to fund their own growth. It is one of the most important structural reforms required to lift living standards across the developed and developing world. Rampant corporate tax avoidance torpedoes this central platform of inclusive growth and is now a structural cause of growing domestic and global inequality.[61] But how to deal with the ‘big money’ and political power of the corporate multinationals and tech giants “intent on maintaining the status quo”:[62]

“In solving this problem, political leaders should never underestimate the power wielded by those who are the economic beneficiaries of politically-inspired inequality. Some plain speaking is required; starting with the obvious point that tax avoidance or evasion on such a grand scale impoverishes us all. When companies fail to pay their fair share of tax, revenue must be found elsewhere – from other businesses or individual taxpayers. The billions of dollars extracted are forever lost to health or education or infrastructure investment that improves the lives of people across the community, but is also vital for productivity growth and so ultimately supports the bottom line for businesses.

There must be a debate about the ethics of this behaviour … there is a stark contrast between the esteem in which the boards of these participating companies expect to be held and their actual behaviour. The reputations of the boards who have approved these practices and those who have provided advice should be on the line. Corporations are not ends in themselves.”

The dispute over a tech tax could become a defining clash for modern capitalism, pitting the forces of globalisation and the huge tech companies they have produced against the growing popular discontent about shape-shifting big business [that shift revenues and/or profits to pay less tax than they should in the countries in which they operate].


– The global hunt to tax Big Tech, Financial Times[63]

Across the globe we find ourselves in this situation because globalization and the digital economy has transitioned the landscape from a world ordered by geography (i.e. control over borders, national markets, and nations states) to one where geographical boundaries are diffuse and permeable, with decreasing relevance in respect to control over economic and political activities. And understanding that the “rules” have changed – that in many cases political and economic influence (and even power) has shifted from nations to markets and multinationals is a big deal that requires a dramatic reconceptualization of what is meant by “political space”. As one commentator noted, “the centre of gravity in world politics has shifted” from “the public agencies of the state to private bodies of various kinds, and from states to markets and market operators”.[64]

Within this reality of corporate influence, the problem in large part is the “two megatrends” of “polarization and monetization of politics”.[65]  While it would be unwise to simply reduce the answer to just this snapshot, from a big picture perspective, the answer certainly includes the fact that our 20th-century political, social, and economic structures are drowning in a 21st-century ocean of (a) political parties and governments awash in corporate ‘big money’ influence,[66] (b) political polarization and partisan “zero-sum” ideology (that is disconnected from the wider society),[67] (c) widening economic inequality and cultural division, (d) deregulated finance, (e) globalization, (f) autonomous technology,[68] and (g) a changing employment landscape (i.e. job insecurity; underemployment, precarious and non-standard gig work; wage stagnation; polarization of labour market between high earners and everyone else).[69] These are profound changes that are impacting and transforming the workforce and society in post-industrial economies.[70] There is growing anxiety and uncertainty about the future, and amid the political, economic, and social change many see not only less economic and social opportunity for themselves, but also for their children going forward.[71] This represents real costs to real people:[72]

“For increasing numbers of people, our nations and the system of which they are a part now appear unable to offer a plausible, viable future. This is particularly the case as they watch financial elites – and their wealth – increasingly escaping national allegiances altogether. Today’s failure of national political authority, after all, derives in large part from the loss of control over money flows. At the most obvious level, money is being transferred out of national space altogether, into a booming “offshore” zone.[73] These fleeing trillions undermine national communities in real and symbolic ways. They are a cause of national decay, but they are also a result: for nation states have lost their moral aura, which is one of the reasons tax evasion[74] has become an accepted fundament of 21st-century commerce.”

A clash between corporate interests and national interests is to be expected, and the assumption is that when it occurs, the former will dominate the latter. Despite the fact that mangers of global corporations are neither elected nor subject to popular scrutiny, in the course of their daily business they make decisions with more impact on the lives of ordinary people than most generals and politicians.


– Professor Stephen J. Kobrin, The Wharton School[75]

In this environment of accelerating socioeconomic inequality and weak institutional safeguards, a major concern is the unjustifiable and disproportionate influence that corporate business interests have on government policy making,[76] particularly in the United States.[77] A U.S. Senator has admitted that “career politicians’ ears and wallets are open to the highest bidder”,[78] and a former Vice President of the United States has stated on the record that “American democracy has been hacked”, that the United States Congress “is now incapable of passing laws without permission from the corporate lobbies and other special interests that control their campaign finances”.[79] Corporate special interest groups that are prepared to invest a lot of money in a particular political issue will often beat the broader national interest.[80] In addition, in 2018:[81]

“Mick Mulvaney, the White House budget director and acting head of the Consumer Financial Protection Bureau, told lobbyists … what they already knew: Legislators are dependent upon their funders, and their funders are not the people.

Speaking to 1,300 attendees of the American Bankers Association conference, Mulvaney … pleaded with the bankers to use that insight to get Congress to dismantle the consumer protection agency that he now heads. …

But while this economy of influence of D.C. has been well-known among its players for some time, what is striking now is how open the players have become about sharing this corruption with the public. The only way to break this culture is through radical changes that change how we fund our elections.

Yet Washington seems comfortable with the influence bazaar it has built; it seems wholly unconcerned that some wannabe savior will come to cast the money changers from the temple of democracy.

It cannot be that a system so dependent upon such an unrepresentative few could ever represent the many fairly or effectively. That is the fundamental underpinning of our representative democracy, and that is the simplest way to see its corruption. James Madison [the fourth President of the United States] promised a Congress “dependent on the people alone,” yet Madison’s promise is a fantasy today. Congress is dependent not on the people alone but on the funders of campaigns. …”

Not surprisingly, in the U.S. there is “an urgent need for reform for disclosure of how much money” powerful corporate “political lobbyists are giving law makers who are writing relevant tax legislation”.[82]

Many companies are larger economic entities and with potentially greater influence than the countries in which they operate. According to one estimate, 69 of the top 100 wealthiest economic entities in 2016 were corporations, not countries.


– KPMG[83]

‘Big money’ – including untraceable ‘dark money’ – appear to permeate, polarize, and undermine the world’s political and government systems,[84] introducing influential private interests where only the public interest – the common good that benefits society as a whole[85] – should be considered.[86]  To often corporate ‘big money’ appears to call the shots, with politicians across the spectrum frequently guilty of unduly favouring the demands of their ‘big money’ corporate and financially elite donors over the needs of their constituents and the citizens of their countries. Some studies have found corporations and the billionaire economic elite have obtained as much as a 22,000 % return on their financial investment into politicians and the political system.[87]

Our country today, and indeed much of the world, is run by and for billionaires [and corporations] actively manipulating the political process. They have the means, power, influence and muscle to get their way.


– Jeffrey Sachs, Professor and Economist, Columbia University’s School of International and Public Affairs[88]

“Corporate globalization” refers to the “belief that corporations are the dominant political actors of our time”.[89] It has been noted that the defining feature of this concentration of private wealth and power “is the effort on the part of holders of this ideology to defund or de-provision public goods, in order to defang a state that they see as a threat to their prerogatives”. Practically speaking this “takes the form of efforts to lower taxes,[90] which necessitates the cutting of spending on public goods; to reduce regulations that restrict corporate action or that protect workers;[91] and to defund or privatize public institutions, such as schools, healthcare, infrastructure, and social spaces”. The political strategy “is to use austerity in the face of economic shocks to rewrite social contracts on the basis of a much narrower set of mutual social obligations, with the ultimate effect of decollectivizing social risks. As a palliative for the loss of public goods and state-backed programs to improve public welfare, plutocratic [advocates] typically promote the idea of philanthropy – directed toward ends defined not democratically but by themselves”.[92] In this respect, some financial and corporate special interests appear to advocate for equality – except in ways that threaten the social order and their position atop it. The hard question for governments and policy makers is why society’s gravest problems should “be solved” by corporate and financial special interests instead of the very public institutions they are undermining and eroding  by their lobbying, corporate ‘big money influencing of relevant legislation, and tax avoidance.[93]

This triumph of the “one per cent” follows decades of cuts to the social welfare programs that strengthen the fabric of our society. According to a report by the OECD, Canada ranks 24th out of 34 countries in social expenditures as a percentage of GDP.


– The Conversation[94]

For not the first time in geopolitics, “among us today a concentration of private power without equal in history is growing”[95] – and while “low taxes, light-touch regulation, weak unions, and unlimited campaign donations are certainly in the best interest of the plutocrats”, multinationals and tech giants, that “doesn’t mean they are the right way to maintain the economic system that created today’s super elite”.[96]

Mature democracies need to pay close attention to the architecture of their political and tax systems. The combination of globalization, the global financial crisis of 2008, and the digital revolution has undermined the economic and cultural security of the middle and working class and made some of democracy’s most important institutions look outdated.[97] And, inequality fuels populism and makes fertile ground for a deeply polarized and reactionary form of politics unsuited to the complex times in which we live.[98] 

Signs of democratic discontent are particularly visible in Anglo-American democracies and other post-industrial societies (particularly acute now during what is referred to as the Fourth Industrial Revolution[99]).[100] In this context, it may be fair to say that contemporary populism[101] has taken a not so surprising twist of late, with rich country electorates in the U.S., the UK, and Europe opting for what appear to be the extreme alternatives to the status quo. Populist leaders are gaining support, votes and seats in Western countries, particularly in Europe.[102] Commentators have noted that the current U.S. President is “far from unique”, fitting into “the wave of authoritarian populists whose support has swelled in many Western democracies”.[103]

All around the world, people have an overwhelming sense that something is broken. This is leading to record levels of populism in the United States and Europe, resurgent intolerance, and a desire to upend the existing order. The left and right cannot agree on what is wrong, but they both know that something is rotten.


– Jonathan Tepper and Denise Hearn[104]

More than two centuries ago, Rousseau’s social contract helped to seed the idea among political leaders that they must serve the public good, lest their own legitimacy be threatened. Indeed, governments and political parties – those with the will, the means, and the inclination – will address innovative ways to meet the needs of the public, by revisiting the social contract that binds citizens and the state. This means rethinking and modernizing and recapturing the intent of the international corporate taxation system. In this respect, it most certainly means changes in the way governments across the world collect taxes from multinational enterprises and the tech giants. This type of vision will require open-minded civil discussion, international collaboration, respect for a multilateral rules-based world,[105] and – it may be fair to say – strong leadership from governments and international organisations to plug even some of the most egregious loopholes”.[106] Fortunately, as tax avoidance becomes more of a reputational issue for multinationals and the tech giants, at least some of their executive leadership teams are beginning to recognize that least  the most appalling examples of tax avoidance are “is not a good look“.[107]

Ultimately, for any solution to take place – particularly in today’s polarized and fractured world order[108] – it will be critical to address the issues of ‘big money’ corporate influence in the political world and for leaders to rebuild trust in international relations. Although we live in a complicated world, “human beings wrote the rules of this game, so we decide when and how to change them”.[109]

The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself.


– President Franklin Roosevelt, April 1938[110]

https://fireheartmusic.com/alblh5bmt4 The Archaic International Tax System meets the Digital Economy

While there have certainly been flaws with the international corporate tax rules over the years, these flaws have been radically exacerbated by the digital economy. In particular, multinational enterprises and the tech giants have been emboldened to strategically structure and implement their business models, operations and tax avoidance schemes to pay little or no corporate taxes in the countries in which they have significant economic presence, revenues and profits.

Google moved 19.9 billion euros ($22.7 billion) through a Dutch shell company to Bermuda in 2017, as part of an arrangement that allows it to reduce its foreign tax bill … .  The amount channeled through Google Netherlands Holdings BV was around 4 billion euros more than in 2016.


–  Reuters[111]

In this respect, the rapid expansion of the digital economy has created momentous challenges for the global corporate tax regime. Today’s tax systems are not only marred by the bewildering complexity and loopholes that have always afflicted taxation; they are also outdated as they fail to adapt to technological change and new digital business models implemented by multinational enterprises and the tech giants.  The archaic international corporate tax system and national tax systems have become so complex and full of contrary intentions that they have created a situation in which multinational tech companies like Google, Microsoft, Facebook, and Amazon can use their significant digital presence and complex international accounting schemes to channel earnings to low-tax or no-tax “tax haven” jurisdictions and pay only minimal amounts of tax within the countries they actually conduct business and earn revenue, and at a global level[112]:[113]

“[Multinational Corporations] that adopt aggressive tax-planning strategies rely on the mismatches and gaps that exist between the tax rules of different jurisdictions. They minimize corporate tax contributions by making taxable profits ‘disappear’ by shifting profits to low-tax operations where there may be little or no genuine economic or profit-making activity. They can artificially attribute the ownership of assets or the locations of transactions to paper subsidiaries in secret jurisdictions with zero or low nominal tax rates, known as ‘tax havens’. …

Tax havens are jurisdictions or territories which have intentionally adopted fiscal and legal frameworks allowing non-residents (physical person or legal entity) to minimize the amount of taxes they should pay where they perform a substantial economic activity. They usually fulfil several of the following criteria (to be applied in a combined way): (i) They grant fiscal advantages to non-resident individuals or legal entities only, without requiring that substantial economic activity be made in the country or dependency; (ii) They provide a significantly lower effective level of taxation, including zero taxation for natural or legal persons; (iii) They have adopted laws or administrative practices that prevent the automatic exchange of information for tax purposes with other governments; or (iv) They have adopted legislative, legal or administrative provisions that allow the non-disclosure of the corporate structure of legal entities (including trusts, charities, foundations etc.) or the ownership of assets or rights.”

The term “aggressive tax avoidance” is often used to describe corporate transactions whose primary purpose is the avoidance of tax. The ethics of reducing tax liabilities becomes problematic when such taxes are aggressively avoided through creative schemes that are not intended or authorized by the state – but which do abide by the letter of the law. This is “formally legal but highly questionable, seriously harmful and often unethical”.[114] Why? Because the economic manipulation and tax avoidance schemes by multinational and giant tech corporations have left individuals within countries across the world – in particular the vulnerable middle and working class and the poor – to pick up the significant losses.[115]

Tax havens operate through ‘empty’ structures that often have no connection to the location or substance of the company’s economic activity. By doing this, they minimize taxation of business profits at the source (where the real income is generated) and destination (where the MNC’s head office is ‘tax-resident’).


– Oxfam[116]

When the Panama Papers were published in 2016 by an international consortium of investigative journalists, the investigation revealed a bitter truth: that the opaque ‘offshore industry’ is not a minor part of our economic system, but much of the system itself.[117] And within this dark ‘tax avoidance’ paradigm, executive leadership teams are incentivized to avoid corporate taxation[118] and the tech giants have launched a “fierce fightback” against global tax avoidance reforms.[119]

The badly outmoded international and domestic tax regimes – hindered in their slow march to modernization by the political ‘big money’ influence of these international giants – ensure these corporate tax avoidance arrangements are often technically legal. But they drain funds from countries and their citizens by exploiting tax treaties whose actual purpose is to avoid double taxation of profits, not an exemption from tax, and they give multinationals an inappropriate and unfair advantage over domestic companies operating within a country’s national borders that cannot take advantage of such outdated and misapplied mechanisms.[120]Competition is therefore skewed, smaller organizations are paying more tax on smaller profits than the multinational, and local enterprise and innovation is discouraged. Each country that allows multinationals and the tech giants to operate in this manner inadvertently undermines its own economy – effectively subsidizing the multinational tech giants and their billionaire owners at the expense of their local economy, businesses and start-ups.[121] 

Bezos is the world’s lone hectobillionaire. … He has gotten $50 billion richer in less than a year. … This is a credit to Bezos’ ingenuity and his business acumen. … But his fortune is also a policy failure, an indictment of a tax and transfer system and a business and regulatory environment designed to supercharging the earnings of and encouraging wealth accumulation among the few. … The result of these decades of trends and policy choices is that Jeff Bezos has accumulated a $150 billion fortune while the average …  family is poorer than it was when the [2008] Great Recession hit. … Rising inequality fuels political polarization and partisan gridlock … it makes government less responsive to the demands of normal people, potentially putting our very democracy at risk.


– The Atlantic[122]

In this environment there are significant economic and social issues driving the discussion regarding the tax challenges of the digital economy. The dialogue is often framed in a manner that identifies highly digitalized companies as not paying their ‘fair share of tax.’ This assertion is supported by significant social problems in the face of these companies deriving significant revenues in their market countries without paying any, or at least proportionate, tax in those jurisdictions.

The OECD launched the Base Erosion and Profit Shifting project in 2012 – at the request of the G20 – to address the international tax rules that may inappropriately facilitate tax avoidance schemes in respect to the shifting of corporate revenues and profits away from where the real economic activity and value creation are taking place.[123] Base erosion and profit shifting (BEPS) refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially reduce taxable income or shift profits to low or no-tax locations – one important aspect of that project being the digital economy.[124]

Although the OECD’s original BEPS project was expanded over time to include and address the digital economy and corporate digital business models – to no one’s surprise there is currently no consensus on a solution.[125] 

It is not too much of a stretch to argue that their [the tech giants] biggest innovations lie in the field of tax avoidance.


– Are Tech Companies Avoiding Taxes?[126]

Dr. Jeffrey Sachs – economist, public policy analyst, and a professor at Columbia University – has recommended a “tech tax” to avoid a ‘dystopian future’ where global wealth is concentrated in the hands of a few thousand people.[127] As noted by one commentator, how international and domestic taxation of the digital economy is addressed “may well mark the difference between a viable future, and a very modern nightmare”.[128] Make no mistake, international tax avoidance by multinational corporations is not victimless:[129]

  • Widespread aggressive tax avoidance by billion and trillion dollar multinational companies “suggest that the social compact that enabled the creation of our societies is seriously under threat”.[130] If a country “behaved like Apple, Google and the rest of them – and they are richer than many countries – they would be regarded as rogue states”.[131]
  • Enormous tax avoidance not only strips national treasuries of the means to fund the public goods of modern societies – to meet the needs of its citizens – but also destroys the idea of social solidarity and the requirement that, because everybody benefits from the state, so everyone should appropriately contribute and fund it.[132] Most tax revenue comes from the broad middle and working classes – people who are willing to pay as long as they trust the system is fair.  Although corporations directly and indirectly benefit from government investment in public education, healthcare, infrastructure, government research (i.e. which contributed to the internet and much of the underlying technological innovation that enables the digital economy and which multinational tech giants depend), etc, they actively contrive to avoid paying their fair share,[133] undermining the required trust in our institutions and “threatening the entire fiscal basis of the state”.[134]
  • Countries across the world are seeing heavy cuts to public services (i.e. infrastructure, education, healthcare, emergency services and national security), including some of their cherished social safety net programs.[135] Without adequate tax revenues no government can adequately deliver its legislative program, provide public goods or redistribute wealth.[136]
  • Small national businesses that don’t exploit loopholes are put out of business by multinationals that do, as tax avoidance schemes give multinational companies inappropriate market and competitive advantages. The effects feed down the entire tax and value chains, distorting the economy and compounding the coring out of jobs and businesses in the countries in which they operate.[137] 
  • As multinational corporations avoid paying tax, and public service cuts are being justified by the lack of public money available, there is an increase in workers who are underemployed or forced to accept precarious jobs.[138]
  • A tax campaign NGO group in France suggests Apple’s refusal to pay its share of local taxes (€60bn-€80bn) “shafted” 67 million French citizens,[139] claiming “that Apple has found success because of how it ‘extorts’ billions from citizens by using creative techniques to book profits” and aggressively avoid taxes.[140]  Apple – a $1 trillion dollar company[141] – sued the French NGO protest group for monetary damages and sought a ban to stop future tax evasion protests [note: Apple’s case was dismissed by a Paris court and the tech giant was ordered to pay legal costs].[142]
  • The societal effects are the same in most developed states. Higher taxes are paid by individuals, competition is distorted in favour of large corporations able to go offshore, and overall social inequalities are increased as tax bases are eroded and middle and lower incomes stagnate.[143]
  • The tax avoidance industry is on a collision course with civil society. Governments may wish to invest public revenues in education, healthcare or public transport, etc. – but multinational corporations will exercise the final veto if permitted to continue shrinking the tax base and eroding tax revenues (while redistributing the wealth to its shareholders and executive leaders).[144]

Healthy societies are ones where the re-distributive element of tax works well. Where the “principle of making sure everyone pays their fair share” is respected and upheld.[145] Governments across the world need appropriate tax revenue to stimulate national prosperity, welfare and equitable economic development, and it is a “heavy burden” when companies “avoid taxes on a large scale” and not contribute their fair share.[146] Tax abuse in the form of aggressive tax avoidance deprives civil society of billions of dollars in lost revenues, undermining the social structure of numerous jurisdictions across the world.

Addressing these distortions has become all the more urgent as a result of the rise of the digital economy.[147]

If not controlled, the breadth and scale of tax avoidance by multinationals and the tech giants across the world will significantly contribute to the fragmentation of the social fabric and coherence of nation states. And, as trust in our institutions continue to deteriorate, democracies will struggle to function[148] and public policy will inevitably lag, affecting rich and poor nations alike.

The international corporate tax rules must be updated to reflect the extraordinary growth of the digital economy and the realities of the 21st century.[149] Appropriately done, fundamental tax reform can boost growth and make societies fairer.

We want to have rules that appropriately force people to pay taxes in jurisdictions where the business activity is actually happening.


– Bill Morneau, Finance Minister, Canada[150]

https://masterfacilitator.com/1hvjog9uqc New Nexus for Taxation in the Digital Economy – international taxation of multinational enterprises, Tech Giants, and their digital business models

Context

Across the range of policy issues facing governments today, tax finds itself playing a central role, whether it is about collecting sufficient resources to fund the infrastructure of a society or acting as a policy lever to reflect attitudes and choices about such diverse areas as competition and monopolies, meritocracy and opportunity, education, healthcare, the social safety net, deficit reduction, emergency services and national security, or climate change.[151]  Appropriate taxation resulting from a reformed corporation tax system (international and domestic) would support government priorities, such as a level ‘taxation’ playing field for domestic businesses to compete, finance better public services, balance budget deficits, or perhaps – in the right circumstances – even pay for a reduction in the overall corporation tax rate.[152] 

However, the taxation framework for the digital economy is extremely complex, and the underlying geopolitical landscape and political economy is also nuanced. In reforming taxation rules as they relate to digital business models and a digital presence – given the unique relationship between multinational enterprises/tech giants, governments and consumers in the digital economy – multi-stakeholder participation is ideal (although in the current G-Zero world there continues to be politically charged holdouts to a consensus rules-based framework, and in some cases some politicians espousing an “every nation for itself”[153] outlook). Increased dialogue and coordination among governments, industry, international organizations, and civil society (at domestic and transnational levels) would help build the trust necessary at the international level to develop a coherent and accepted framework for taxation involving the digital economy.

Tax avoidance is a problem for everyone and provides relatively little benefits. This is the case for both poor and rich countries … companies should pay taxes where their economic activities take place. Taxation should be based on the nature and scope of the economic activities (the substance) which companies have in each jurisdiction they are active in, in accordance with the applicable tax regulations in these jurisdictions. https://gungrove.com/u80hb0e86l  


The International Company and Tax Avoidance, European Journal of Multidisciplinary Studies[154]

The alternative is “global tax chaos” as governments chase dwindling tax revenues as a result of multinational enterprises and tech giants employing and being rewarded for aggressive tax avoidance schemes, questionable international corporate tax practices, and an army of tax avoidance professionals.[155] These multinational enterprises know no borders and are taxed (if at all) at a significantly lower rate than the smaller domestic competitors they are looking to displace.[156] 

The need for a digital tax evolution is more pressing than ever, and a truly successful outcome will require a comprehensive and unified approach to global reformation.[157]

The taxation of capital goods is straightforward: the place where the item is purchased is where the value is created for the owner. Facebook or Google might argue that, in their case, the value is in their intellectual property, largely generated in California. But what is in fact monetized is the user’s interaction with their platforms. It therefore follows that the user’s location is where the tax should be paid.


– Alex Webb, Bloomberg[158]

The Problem

Multinational enterprises operate their business in different countries, and strategically handle their business across the world and between nations in order to reduce their corporate taxes. These organizations use complex tax avoidance schemes to exploit mismatches between the countries where they conduct businesses in order to accomplish their goal to significantly reduce their tax exposure (i.e. artificially reduce taxable income; shift profits to tax havens), and – for multinationals, such as the tech giants, with digital business models – “also utilize the digital economy to sell goods in places where they have no physical presence, which often means profits from such sales are not taxed in that country”. With aggressive tax avoidance schemes in today’s digital economy, multinationals may even be able to utilize their digital business and operating models to  obtain the benefit of “double non-taxation”(i.e. commonly referred to as ‘stateless income’, which is not taxed anywhere):[159]

“The spread of the digital economy has made it more difficult to keep track of value creation and ensure proper taxation. With digital services, intellectual property, and other intangibles being used to generate revenue, tax administrations are faced with the challenge of determining where that income is really being generated. The digital economy raises questions about how value is added and profits are made, and how the concepts of source and residence of income should be applied for tax purposes. In order to determine how current rules should be adapted to best prevent BEPS, multinational enterprises’ use of the digital economy must be closely examined to understand how exactly they add value and profit.”

So, two points. Big picture, multinationals have been able to use or misapply the international corporate tax rules through aggressive tax avoidance schemes to artificially separate revenue from the economic activities that produce that revenue in a particular country, and to shift those revenues and profits to a low or no-tax jurisdiction (tax havens).[160] Further, with the growth of the digital economy and the increase of trade and movement of capital, multinational enterprises and the tech giants can operate a digital business model in many countries with a limited physical presence – or even no physical presence – thereby reducing or avoiding their taxable presence. Together this forms the ‘holy grail’ of corporate tax avoidance: corporate enterprises that set up tax avoidance strategies use tax havens and additionally rely on the digital economy and digital transactions to circumvent the concept of permanent establishment (PE) and its taxable nexus implications, thereby transferring significant taxable income to low or no-tax jurisdictions.

These strategies, particularly the ‘holy grail’ strategy of corporate tax avoidance, deprive national governments of significant amounts of tax revenues owed, and substantially undermine the economy and the ability of smaller businesses to compete.[161]

Governments haven’t yet caught up with this situation. Most are still using concepts and mechanisms for taxation and trade that were developed many decades ago and are no longer suitable for today’s world.


– Nicholas Bray[162]

Within this international tax quagmire and general concern for corporate tax avoidance, the biggest issue bringing the system to a fundamental crisis may well be that the digital corporate business model that straddles national boundaries and the global economy is not in synch with the world today. While we now live in a digital economy, the international and domestic tax regulations still adhere to the archaic ‘bricks-and-mortar’ principle of permanent establishment (PE), whereby companies – in particular the trillion dollar tech giants – are taxed  based on the extent of their physical presence in a country without reference to their enormous digital and economic presence.  In this context, governments and policyholders around the world are struggling with how to tax digital companies, which sell billions of dollars of software and services across borders instead of goods – and taxation is based on the extent of a multinational’s physical presence in a particular country as opposed to their digital presence and the actual revenues and profits they earn from the citizens of these countries as their customers and users:[163]

“Today’s international corporate tax rules are not fit for the realities of the modern global economy and do not capture business models that can make profit from digital services in a country without being physically present. Current tax rules also fail to recognise the new ways in which profits are created in the digital world, in particular the role that users play in generating value for digital companies. As a result, there is a disconnect – or ‘mismatch’ – between where value is created and where taxes are paid.”

And within the context of corporate tax avoidance, boy has this rule been taken advantage, particularly by the tech giants who have established their headquarters in alternative ‘tax haven’ jurisdictions, limited or refused to establish a physical presence in countries in which they have an economic and digital presence, created monopoly platforms and products that have changed the way people live, and reaped billions of dollars doing so. But at the same time, the countries and cities around the world – where the customers and end-users “from whose pocket the payment was made”[164] reside – have become harder and harder to live in while the multinational digital corporations who directly benefit from the situation have not paid their fair share of corporate taxes (within those countries they digitally operate) to help solve these problems. Rather, the executives and Boards of these corporations embrace the myopic – and erroneous – view that their business’ sole role is to make its owners and shareholders money.[165]

Aware of the damage that tax avoidance can do to reputations, particularly in fiscally-challenging times, firms are becoming more secretive. One revelation in the Paradise Papers includes an Apple memo, sent to the company Appleby, which arranged some of the company’s tax affairs, that read “for those of you who are not aware, Apple [officials] are extremely sensitive concerning publicity. They also expect the work that is being done for them only to be discussed amongst personnel who need to know”.


– Simon Brew, Tech companies, tax and the Paradise Papers[166]

Boards have a fiduciary duty to a number of stakeholders, and not just shareholders.  The long-term health of the company itself, and the communities in which they operate and the economic system generally, depends on getting the role of shareholders[167] right in the stakeholder continuum.[168] In this context, the Boards and executive leadership teams of multinational enterprises and the tech giants must overcome the ‘forces of short-termism’ and cultures of greed,[169] and reinvigorate an ethos of ethics and public purpose that appear to have become dangerously decoupled from many of today’s leading organizations such as Amazon, Google, and Apple.[170] To “prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate”.[171]

The error at the heart of corporate leadership: most CEOs and Boards believe their main duty is to maximize shareholder value. It’s not. 


–  Harvard Business Review[172]

As noted by the UK’s Chancellor, “it is clearly not sustainable or fair that digital platform businesses can generate substantial value” in a particular country “without paying tax” there.[173] The tax burden that should have been paid by these tech giants within those countries in which they digitally operate and profit not only contravenes the corporation’s civic obligations, but substantially deprives these countries and their citizens of critical resources to fund public services (i.e. infrastructure, healthcare, education, social safety net) and reduce deficits, and exacerbates income and wealth inequality.[174] It is simply not sound or appropriate public policy that online revenues generated in one country (i.e. UK, Australia, Canada, Germany, etc) can be artificially taxed in a low or no-tax jurisdiction elsewhere by multinational tech giants utilizing tax avoidance and profit shifting strategies and schemes:[175]

“In 2015 [Apple] scraped together £13m for a UK tax bill, while enjoying global profits of £35bn. The company withholds what proportion of its revenue is UK-origin, but it is reported to be about 10%. Were that figure correct, a unitary system based solely on sales would conclude that £3.5bn of those global profits were UK-origin. At a corporation tax rate of 20%, Apple would owe the UK £700m for the tax year – more than 50 times what it actually paid. …

Apple has 6,500 employees in the UK (1,000 more than in Ireland, its European headquarters), which is about 5% of its worldwide total of 123,000 employees. An equal split between sales and employees would determine that 7.5% of Apple’s global profits were UK-origin, and thus it owed a tax bill of £525m.”

According to analysis by the financial services company Standard and Poor’s, between 2007 and 2015 the average effective rate of tax paid in the U.S. by the country’s 500 highest-valued firms was put at 27%. By contrast, over the same period, Apple paid 17% of its US profits in tax, Alphabet (Google’s parent) paid 16%, Amazon paid 13%, and Facebook paid just 3.8 %. In 2017, Amazon’s US profits were more than $5.6bn, yet it paid almost no federal income taxes, partly thanks to “excess stock-based compensation deductions”:[176]

“Outside the US, the disparities between takings and tax are even more glaring. In 2016, Apple paid $2bn of tax on $41bn of profits generated elsewhere, an effective rate of 4.8%. This year, a report by the new think-tank Taxwatch[177] dug into the mess of complexity that surrounds the UK tax affairs of some of the biggest tech firms. Facebook, Google, Apple, Microsoft and Cisco, it said, generated UK profits in 2017-18 of more than £6.6bn, but paid a combined tax bill of £191m – as opposed to the £1bn Taxwatch says they ought to have contributed. In the same period, Airbnb paid a mere £600,000 in corporation tax, and questions have been asked (but not yet answered) about whether Uber should be charging VAT on its booking fees and paying it to HMRC. Meanwhile, the branch of Amazon that runs its UK fulfilment centres paid£1.7m in taxes, despite declared profits of £72m. The companies insist they abide by tax laws and pay the amounts due from them.”

Even with a conservatively estimated annual tax revenue loss of USD 100 to 240 billion due to tax base erosion and profit shifting, the stakes are high for societies and their governments around the world.[178]

As noted by the Wall Street Journal, tech giants such as Apple are “world-class innovators in tax avoidance”, and their aggressive “legal setups defy economic logic”.[179] Amazon employs two of the largest accounting firms in the world to maximize revenue but minimize taxes – a strategy referenced by one commentator as “skim the cream and leave nothing for the tax man”.[180] And the Big Four accounting firm Ernst & Young (the auditor of intangible revenue super users such as Facebook, Zynga and Groupon), has written the book – “literally” – for organization’s to aggressively utilize and implement creative revenue recognition policies for “innovative” new business models:[181]

“Amazon’s … sophisticated tax avoidance strategy using low-tax Luxembourg cost tens of millions to design and implement.”

All of these tax havens have something in common: they have a tax treaty or Tax Information Exchange Agreement (TIEA) with Canada. These treaties and agreements were meant to prevent the double taxation of corporate profits, but in practice they make it possible for companies to avoid paying tax altogether, recording profits where there are low or no income taxes and then repatriating this income to Canada tax-free. Canada has admitted this is a problem [joining] an international effort to crack down on a widespread tax avoidance method called “profit shifting,” where a corporation performs internal transactions to concentrate its profits in tax havens.


– Toronto Star[182]

Increasingly aware of this imbalance, the international community – with recommendations from the OECD – is actively looking to modernize the international taxation system to appropriately tax digital transactions and reduce tax avoidance and fraud, both actual and perceived, which can occur under the cover of technological opacity.[183]  Due to the influence of corporations and their lobbyists on government public policy, particularly in the U.S.,[184] some countries are looking to act unilaterally – as an interim solution within their jurisdictions and to spur on an international consensus and ultimate resolution. These countries’ concern is that the disproportionate and unhealthy influence that corporate business interests and their “big money” politics have on individual politicians, the OECD and member governments may undermine the international process, discussion and outcome: [185]

“Companies have been cautioning against the EU’s digital tax proposals — especially the interim levy — saying they could harm the business environment. The Information Technology Industry Council, which represents companies including Amazon, Apple and Facebook, said in a press release that the commission’s proposal “harms business certainty in Europe and would chill trade and investment from companies across the globe.” U.S. Treasury Secretary Steven Mnuchin echoed their position last week, saying the U.S. opposes singling out digital companies ….”

Chris Denning, Corporate and International Tax Partner comments that while the new [UK] Digital Services Tax (DST) runs the risk of US retaliation, the UK may be seen as leading the way in taxing some multinationals more fairly. … The focus of DST is solely on “digital” business models so it will not impact other perceived tax avoiders such as Starbucks etc. … The government’s policy paper says that the DST legislation will include a review clause and is intended as an interim measure until the international community gets it act together.


–  MHA MacIntyre Hudson, Chartered Accountants, tax and business advisors[186]

Given the important role PE permanent establishment rules play in tax treaties and the taxation of digital commerce, a modern definition and tax nexus that includes the reality of digital businesses and digital business models is in order – one that is based on a significant economic presence that accounts for both physical presence and/or digital presence.[187] With the common good at stake, managing today’s international tax dilemma and implementing a global solution in respect to the digital economy and aggressive corporate tax avoidance will take vigorous leadership, good judgement, and principled governments across the world providing backing.

In order to establish and promote an international solution, the following two big picture issues will have to be addressed:

  • (1) How to appropriately establish and protect taxing rights in a country where a multinational enterprise has a significant digital and economic presence but either a limited or no physical presence,[188] and 
  • (2) How “taxing rights on income generated from cross-border activities in the digital age should be allocated among countries”.[189] 

Is Amazon too big to tax? The e-commerce giant paid zero federal taxes in 2017. … Amazon will continue to grow at a rapid clip, gobbling up e-commerce market share and posting staggering revenues. … Amazon appears to have built their profit maximization strategy around avoiding taxes at various levels. … It’s reached the point where Amazon, over the past few years, has made an effort to pay some tax – largely, it seems, to avoid bad press. https://www.ngoc.org.uk/uncategorized/future-events/vnjytg03  


– Alex Shephard, The New Republic[190]

A Way Forward

Due to the increased digitalization of the economy and the digital business models and tax avoidance strategies employed by multinational enterprises and the tech giants, there are significant concerns with respect to the international corporate tax system (i.e. PE tax nexus rules, etc.) and how these outdated rules are utilized by some corporations in the digital economy to misalign taxing rights from the countries where their economic activities are performed and where their revenue and profits are created.

As digital taxation policy and corporate tax avoidance becomes a defining international and domestic tax issue, the OECD should be commended for its work evolving and modernizing the international consensus on corporate taxation, framing the need for a new digital economy taxation standard, and identifying the need for comprehensive, multilateral digital-era tax standards and definitions:[191]

“What do we do about the corporations that are driving huge social and economic change, but have so far proved reluctant to pay anything approaching their fair share of tax? From that follows the second, even graver conundrum: if things stay as they are, what could happen to just about everything that depends on government funding?

Clearly, an aversion to being taxed is hardly unique to tech companies. But in the ways digital communication and commerce operate, there lies an abundance of opportunities for light-footed firms. When you use Facebook or Google via servers that might be located in any number of places, where is the economic activity to be taxed located? In the absence of any clear answer, the tech giants have spun huge webs of obfuscation: subsidiaries that superficially trade with each other, hefty “administrative expenses”, tax discounts from employee share schemes, and holding companies based in low-tax jurisdictions such as Luxembourg, Jersey and the Cayman Islands. A patina of liberal piety – Google’s unofficial motto “Don’t be evil”, and all that – plays its part in obscuring what has been going on. So too does the endless competition between countries and cities desperate to attract tech businesses, something recently glimpsed in the unseemly spectacle of US cities offering Amazon generous tax incentives, as they competed to become the home of the company’s second HQ.”

[T]he most striking element of the OECD’s work on BEPS is the manner in which it articulates the root of the problem: the extent to which current tax laws permit members of multinational corporate groups to assign income to zero- or low-tax countries in which they conduct few if any business activities. … The key to curtailing BEPS therefore, in the words of another recent report from the G20 Group, is ‘to put an end to the divorce between the location of profits and the location of real activities’.


– Michael Durst[192]

Any solution to these issues will indeed require the modernization of the international taxation rules to recognize today’s realities and the real link between where digital profits are made and where they should be taxed.  Countries must have democratic sovereignty within their borders,[193] appropriately taxing multinational tech companies’ income or profits actually generated from on-line revenue by their digital presence within their jurisdiction, even if the multinational tech companies do not have a physical presence there.

An effective long-term solution – that strengthens the integrity of the international corporate tax system as well as encourage buy-in nationally and across the global playing field – will have to address coherence of the corporate tax rules at the international level, realign the taxation of corporate income and/or profits with the location where the economic activities generating those revenues and profits occurred, and improve transparency[194] in respect to “comprehensive public country-by-country reporting for multinationals” (so that tax authorities can apply their country’s tax laws effectively). And, the beginnings of a policy answer appears to lie in (1) an updated taxable nexus of “significant economic presence” (a PE refined to include both a physical presence and/or a digital presence), and (2) what economists call “formulary apportionment” – also known as “unitary taxation” – a paradigm shift which leading tax experts have long advocated.[195]  They may be described as follows:

  • A taxable nexus based on “significant economic presence”: This would require extending the permanent establishment (“PE”) rule to be extended from simply a “physical presence” in a particular country to also include a “digital or virtual presence” as well (i.e. sales revenue, users, etc.). This would establish and protect taxing rights in a country where the multinational enterprise has a significant economic presence[196] (whether through a physical presence or a digital presence), and is an appropriate compromise and fair balance between the “country of residence” of the multinational enterprise and the right of the “market [or source] country” to have a fair share of taxes in respect to the revenues and business activities located in its jurisdiction.[197]
  • A move toward a unitary taxation system and formulary apportionment that addresses taxing rights and allocation:[198] A unitary system of taxation would treat a multinational enterprise – and its related group of companies located in countries around the world, including ‘tax havens’ – as a single economic entity that negates profit shifting, and would establish how taxing rights on revenues and profits generated from cross-border activities in the digital economy should be allocated among countries.[199]

[B]y adopting a new nexus based in economic presence to attribute a PE to a business, the right allocation of taxing rights to the source state [the market country] would be re-established in the digital economy.


– Lara Coelho Nogueira[200]

This type of policy would restore a fair and balanced sharing of tax revenue among countries. Under this approach – a new or updated taxable nexus in the form of a significant economic presence (a PE that includes a digital presence) – even without physical presence, a business with significant digital presence would be deemed to have a ‘virtual’ permanent establishment in a country of operation and therefor liable to its corporate tax regulations,[201] including adapted attribution of profit rules. As this matter involves multinational enterprises and tech giants with digital business models, this type of solution has been referred to colloquially as a “unitary tech tax” or simply as a “tech tax” depending on the circumstances.  But to be successful and achieve its objectives, however it may be referenced, this holistic approach will have to attract a reasonable measure of international consensus.[202]

A tech tax unitary model demands transparency (an anathema to secretive tax havens and opaque countries across the world), as the natural starting point “for an international system of unitary taxation would be the multinational enterprise’s “global consolidated accounts” in respect to their related group of companies (i.e. the business revenue of each member of a family of corporate entities engaged in the common enterprise is aggregated).[203]  Multinational corporations would be required to provide “tax authorities of any country in which they operate both a set of accounts for their global activities and information about their physical assets, workforce, sales and profits for the territory in question. Tax would then be decided using a formula based on these factors”[204] and each country can then tax the net income or resulting profit at any rate it determines appropriate.[205] Most U.S. states work on a comparable basis (to negate the impact of domestic tax havens – such as Delaware – and profit shifting), and the European commission has recently indicated some support for the idea[206]:[207] 

“HOW FORMULARY APPORTIONMENT WORKS

Under formulary apportionment, a multinational corporation would allocate its profits across countries based on its sales, payroll, and capital base in each jurisdiction. The corporation would pay [each country’s] corporate tax on the share of its worldwide income allocated to the [particular country in question]. An alternative formula would base a corporation’s [taxes in a particular country] only on the fraction of its worldwide sales destined for domestic consumers, a so-called “destination-based” corporate profits tax.

Many states in the United States use a formulary apportionment system to determine their taxable share of US-source corporate profits. The formulas have been historically based on a weighted average of the shares of sales, payroll, and assets in the state. But some states have shifted to a sales-only apportionment system to remove any incentive to shift employees or facilities to other jurisdictions. …

ADVANTAGES OF FORMULARY APPORTIONMENT

Formulary apportionment would remove the current artificial incentive for multinationals to shift reported income to low-tax locations. Tax liabilities, instead, would be allocated by a measure (or measures) of their real economic activity in each location. These measures are far more difficult to manipulate for tax purposes than the division of profits among separate entities within a firm.

Formulary apportionment would also reduce the tax system’s complexity and the administrative burden it imposes on firms. Firms would no longer have to allocate income or expenses across countries for tax purposes. Because intra-firm transactions would not affect the measure of domestic profits, there would be no need for transfer-pricing rules for intra-firm transactions, which would remove a major source of dispute between corporations and tax authorities.

There would also no longer be a need for controlled foreign corporation rules because all profits assigned to foreign activities would be exempt. … Moreover, formulary apportionment would make a multinational corporation’s tax liability independent of both its legal residence and its legal form (for example, branch or subsidiary).”

In this respect, if accepted by the international community, multinational enterprises and tech giants would be taxed based on where they genuinely do business, rather than where they are able to artificially shift their revenues and profits. Why? Because although it is easy to artificially shift profits to another jurisdiction, this is not the case for its actual customers. And a more nuanced model would consider where a company hires as well as where it sells.[208] Of course, individual countries will still have their own interpretations of how much economic activity should trigger taxation within their jurisdiction.[209] This would be a strong foundation of an overall reformation of the current international taxation system being addressed in the ‘Base Erosion and Profit Shifting’ project (“BEPS”) guided by the OECD and approved by the G20:[210]

“A formulary [unitary taxation] system divides some of the income of a business group among tax jurisdictions according to the relative volume of the group’s observable income-producing activities within those jurisdictions.”

How do we force the tech giants to pay their fair share? The answer could lie in a system called unitary taxation. Multinationals would be taxed based on where they genuinely do business, rather than where they artificially shift their profits. https://equinlab.com/2024/01/18/ebg05mk8d


– David Pegg[211]

These key long term policy solutions will require international cooperation to ensure that all updated or new international corporate taxation rules actually tax multinational enterprises and the tech giants in the jurisdiction(s) where the value and revenues take place (their actual economic and “digital presence”), and not just low or no-tax jurisdictions where these multinationals have ‘created’ a physical presence and have artificially shifted their profits.[212]

The broader principle requires a shift to a system where digital companies — which operate across borders — transparently pay taxes where their customers (and users) are located and value is generated.  It is becoming increasingly clear that digital companies require this type of updated and modernized tax rules – designed to fit the modern economy and today’s digital age – as their digital business models and global tax avoidance strategies artificially reduce taxable income and shift profits to jurisdictions of their choice where they can lower their tax bills and avoid paying their fair share of taxes in the actual countries in which they have benefited.[213]

The ‘Action Plan on Base Erosion and Profit Shifting’ (BEPS) proposed by the OECD and approved by the G20 seeks to redefine international tax rules … and ensure companies pay taxes where the economic activity takes place and value is created. … [However] the business lobby currently has a disproportionate influence on the process, which it uses to protect its interests.


– Oxfam[214]

Multinationals and the tech giants are well aware that the existing tax laws on the books are not appropriate for the realities of the modern global digital economy – and, unless changed, cannot capture their digital business models that profit from digital services in countries across the world without being physically present. And these corporate organizations are spending ‘big money’ and lobbying hard against a global holistic solution in which they would be required to pay their fair share of tax and “do so” in the actual countries “where the value is generated”.[215]

In this environment, and as noted by the OECD, developing, agreeing and implementing a global, consensus-based solution will take time – which is why an interim fix is being proposed by some countries and the EU.  Although world leaders prefer a global approach, several jurisdictions have noted that they are prepared to move unilaterally – on an interim basis – until a more comprehensive, longer-term solution is in place.[216]  Many commentators are of the opinion that proceeding with an interim fix may also have the benefit of spurring other governments and the industry to actually reach a global agreement.[217]

France, the UK, Germany, Australia and South Korea are among some of the leading countries looking to take more immediate interim action to address the tax challenges arising from digitalisation.  The countries considering interim unilateral measures recognize the challenges (i.e. potential impact on investment, innovation; possibility of over-taxation), but consider there to be a fiscal and political imperative to act, pending a global solution which is taking time to develop, agree and implement in light of corporate political influence and lobbying and the state of current geo-politics[218] – in particular, the lack of coherence and cooperation at the international level, with certain countries pursuing competing agendas and a doctrine of “every nation for itself”,[219] provoking division across Western society and undermining the historically stable ‘rules-based’ international order.[220] Geopolitical shifts have made today’s world multipolar. As new national and global players bring different ideas about how to shape national systems and the international order, including business, the existing world order is increasingly perceived as becoming more fragile[221]:[222]

“Ian Bremmer’s … book, ‘Every Nation for Itself: Winners and Losers in a G-Zero World’, … outlines the universal difficulties inherent in our current global reality. We live, Bremmer argues, in a G-zero world—which is to say a ‘world order in which no single country or durable alliance of countries can meet the challenges of global leadership’. Today’s world is one in which the G7 is history and the G20 is more ‘aspiration than organization’.”

[The EU, in particular Germany and France are] willing to support a ‘sunset clause’ to achieve agreement. That would mean that any EU tech tax would be temporary until international bodies such as the Organisation for Economic Co-operation and Development (OECD) agreed to a similar type of system applicable to all countries.


– BBC[223]

Policymakers looking to implementing an interim ‘digital tech tax’ in the current geo-political environment are of the view that “there is a sound conceptual basis for an interim measure, that value is being generated within their jurisdiction that would otherwise go untaxed challenging the fairness, sustainability and public acceptability of the system” and that “the possible adverse consequences can be mitigated through the design of the [interim tax] measure”. In this respect, the OECD 2018 Interim Report appears to agree setting out design considerations these countries should consider for an interim digital tech tax:[224]

“The challenges of the digitalisation of the economy were identified as one of the main focuses of the Base Erosion and Profit Shifting (BEPS) Action Plan leading to the 2015 BEPS Action 1 Report. In March 2017, the G20 Finance Ministers mandated the OECD, through the Inclusive Framework on BEPS, to deliver an interim report on the implications of digitalisation for taxation by April 2018. This report, ‘Tax Challenges Arising from Digitalisation – Interim Report 2018’ (the Interim Report) has now been agreed by the more than 110 members of the Inclusive Framework.

The Interim Report … reflects the framework of design considerations, identified by countries in favour of introducing interim measures, which should be taken into account when considering introducing such measures. This framework takes into account some constraints, including that any such measures should be in compliance with existing international obligations, temporary, targeted and balanced, minimise over-taxation, as well as designed to limit the compliance costs and not to inhibit innovation. The Interim Report considers an interim measure in the form of an excise tax on the supply of certain e-services within their jurisdiction that would apply to the gross consideration paid for the supply of such e-services.”

The UK would clamp down on overseas technology firms like Google and Facebook by acting unilaterally to introduce a digital revenue levy, if efforts to agree to an international solution on tax avoidance falter, the government said. … tough action would be taken despite opposition from the increasingly protectionist US … The government is working closely with EU partners and the Organisation for Economic Cooperation and Development, which advises on international taxation, to bring in a new global system.


– Pippa Crerar, UK will act alone against tech firm tax avoidance if global solution falters[225]

To some it appears that digital multinational corporations – and the digital economy in which they operate – has a gold-rush mentality, where some tech giants appear to be desperately mining global profit at the expense of society. At best, this appears to mean that only a few, enlightened, companies truly understand their responsibility and the need to pay a fair amount of tax everywhere they operate.[226] And this undermines the trust of citizens in their countries’ institutions when online revenues and profits generated by multinational tech giants in those countries are taxed elsewhere in low or no-tax jurisdictions. People may no longer feel that their voices are being heard or their interests represented by those in power. Mistrust is infectious and if people perceive the tax system as unfair – or if they believe others are not paying what they should – they may be more inclined to break the rules themselves. This means that developing a transparent, simple, rigorously enforced tax system – where everyone pays their fair share – should increase tax morale, improve compliance, and improve society.[227]

As such, it is becoming increasingly clear that multinationals and the tech giants (with their digital business models) require a new set of tax rules because their Boards and executive leadership teams appear to be leading them on a continuing path of artificially shifting revenue and profits to jurisdictions where they can lower their tax bills.[228] The European Union, the UK, and South Korean lawmakers are just a few of the world’s countries taking the lead to impose an interim “digital tax” on these multinational tech companies that are actively implementing tax avoidance schemes and business models to avoid paying the appropriate tax to the local jurisdictions while generating billions of dollars of revenue for themselves and their shareholders.[229]

Although an international ‘digital tech tax’ consensus would be ideal, until such time as this is possible, the current and future loss of billions of dollars in taxes to those countries and societies in which these companies digitally operate would appear to justify and support an interim unilateral digital tax measure. In this respect, Mr. Chris Singer – head of tax policy at Ernst & Young (EY) – has recently noted that the fact the UK’s proposed interim digital services tax does not require a formal review until 2025 indicates that UK policymakers are of the view “that it will take quite a while for the OECD to gain any consensus on the international stage”.[230]

Rightly or wrongly, in light of the of the decades of aggressive tax avoidance and ‘big money’ political lobbying by multinational enterprises and the tech giants, the recent words of Google’s CEO – “we are happy to pay a higher [tax] amount” when “the world agrees on … the right framework[231] – appears to support the OECD and UK’s pessimistic view that an internationally agreed upon solution will not likely take place in the near future.

Facebook, Google may face billions in new taxes across Asia, Latin America: Europe’s proposal to impose a new tax on tech giants is inspiring other governments.


– Wall Street Journal[232]

https://sieterevueltas.net/j5zaw1hnpny Conclusion https://modaypadel.com/q3yva4ymu

A fair and appropriate tax system is at the heart of a strong society and the lifeblood of democratic government and the social contract.[233] A well-functioning tax system is the foundation stone of the citizen-state relationship, establishing powerful links based on accountability and responsibility. It is also critical for inclusive growth and for sustainable development, providing governments with the resources – the tax revenue – to invest in public goods such as infrastructure, education, health, emergency services and national security, social protection systems.[234]

Unrestrained corporate tax avoidance not only reveals the dark underbelly of unrestrained globalization but undermines societies’ institutions and the public’s trust.

We live in an era of capitalism gone amok.


– Louis-Philippe Rochon, Canadian Keynes scholar and economics professor[235]

Today’s international corporate tax rules are not fit for the realities of the modern global economy and do not capture business models that can make profit from digital services in a country without being physically present. Current tax rules also fail to recognise the new ways in which profits are created in the digital world, in particular the role that users play in generating value for digital companies. As a result, across the world there is a disconnect – or ‘mismatch’ – between where value is created and where taxes are paid.[236] However:[237]

“To say that Apple or Google simply took advantage of the current system is to let them off the hook too easily: the system didn’t just come into being on its own. It was shaped from the start by lobbyists from large multinationals. Companies like General Electric lobbied for, and got, provisions that enabled them to avoid even more taxes. They lobbied for, and got, amnesty provisions that allowed them to bring their money back to the US at a special low rate, on the promise that the money would be invested in the country; and then they figured out how to comply with the letter of the law, while avoiding the spirit and intention. If Apple and Google stand for the opportunities afforded by globalisation, their attitudes towards tax avoidance have made them emblematic of what can, and is, going wrong with that system.”

What can leaders and policymakers – political, social and business leaders – do about any of this? From a policy perspective, the international community and individual countries around the world must adapt their tax administrative systems and policy approach to taxation of digitalized businesses across the board. They must continue to push for multinational enterprises, in particular the tech giants, to pay their fair share of taxation – to appropriately contribute to public finances and services – at the same level as traditional “bricks-and-mortar” companies in the countries in which they digitally operate and their customers and end-users are located.[238]

Society is demanding that companies, both public and private, serve a social purpose … To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.


– New York Times, Blackrock’s Message: Contribute to Society, or Risk Our Support[239]

The international tax framework cannot remain static, tax policy and laws must be responsive to the evolving nature of the world’s economies in the digital age, and must recognize and address new digital businesses that operate and create value in different ways. An appropriate long-term resolution – embedding the taxation of the digital economy in the general international corporate tax framework – proposed by many policymakers is for each country to tax multinational tech companies on the basis of their digital or virtual presence: they should be taxed in the countries in which they have a significant economic and digital presence with customers and end-users (the taxable nexus) and generate value (revenue, income, profit).[240]

In addition, to be successful there is also a need for a transparent ‘digital presence’ unitary taxation system that views and taxes multinational enterprises as a single firm (combining global revenues and profits and apportioning to each country across the world based on the corporation’s economic activity there).[241]  A solution along these lines would be a strong foundation for the overall reformation of the current international taxation system being addressed in the OECD’s ‘Base Erosion and Profit Shifting’ project.

http://www.wowogallery.com/n5lxhont Taxes are what we pay for a civilized society.


– Oliver Wendell Holmes[242]

However, powerful interest groups are unlikely to simply agree to these types of international tax reform for one important reason: it would likely include a significant reduction in opportunities for corporate tax avoidance (i.e. BEPS). Multinational enterprises, tech giants, and business groups with a direct financial interest in discouraging this type of international tax reform will likely continue to channel discussion and proposals towards, at best, partial measures and significant political compromise.  One can expect continued ‘big money’ corporate lobbying of politicians across the world, and within their home countries.[243]

Nevertheless, business is part of society – not apart from society – and there is a growing consciousness of the need for a higher duty of care towards society. One that is not simply to maximize shareholder value, but to act reasonably on behalf of all stakeholders with a view of a fair return for responsible investors.[244] At the heart of corporate leadership and responsibility is that their “companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate”.[245] In this context tax minimization through “elaborate and frequently aggressive tax-avoidance strategies” is certainly not a prime duty that directors are required to perform on behalf of their shareholders”[246] and may be more appropriately viewed as “highly questionable, seriously harmful, and often unethical”[247] as it undermines the very integrity of the international and domestic tax system and, ultimately, society.

Policy has an essential role to play. And lets keep this in perspective, updating the international taxation rules to meet the realities of the 21st century is not splitting the atom. But in light of the current geopolitics and sombre reality of ‘big money’ politics and corporate influence, the prospect of pulling this off in the near-term will unfortunately be like pulling the ‘sword from the stone’.

However, as corporate tax avoidance becomes increasingly publicized and stigmatized, news of a corporation’s engagement in tax avoidance practices may have an increasingly detrimental effect on brand, reputation and long-term sustainable success. Although some corporations are more susceptible to reputational harm than others:[248]

“If corporate boards, shareholders, and other stakeholders were to approach tax avoidance as a [Corporate Social Responsibility] CSR issue, corporations would be less likely to avoid taxes, because paying the corporations’ fair shares would be not only expected but demanded. Yet, unlike a naming and shaming approach, such a strategy mitigates the risks of driving tax advisors toward more aggressive tax avoidance strategies. Therefore, the incorporation of anti-avoidance principles into CSR could provide incentives for self-regulation where external regulation proves unsuccessful.”

There is no shortage of statistics that illustrate the reality that the benefits of economic growth have been unevenly shared. Government and political leaders — from all political parties and countries — have not done a good enough job addressing the issue and taking care of those who are being left behind. Political and corporate leaders have a collective responsibility to do more. This requires thinking beyond narrow or traditional roles, putting aside self-interest and partisan differences, appropriately collaborating (taking into account the importance of both corporate investment and global trade[249]), and committing to the pragmatic work of making meaningful change.

Yet another reminder that big doors swing on the important hinges of leadership and policy.

Eric Sigurdson

https://www.chat-quiberon.com/2024/01/18/iuzt6tamaai Endnotes:


[1] Tax challenges arising from digitalisation – Interim Report 2018, Eurofound.europa.eu, September 5, 2018; Tax Challenges Arising from Digitalisation – Interim Report 2018: Inclusive Framework on BEPS, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, 2018; Brief on the Tax Challenges Arising from Digitalisation: Interim Report 2018, oecd.org; 3 ways digitalisation is shaping the future of taxation, International Chamber of Commerce (iccwbo.org), March 7, 2018; Ashley Greenback and Riannon Kinghall Were, Taxing clicks: the European Commission’s new digital tax, Practical Law (uk.practicallaw.thomsonreuters.com), May 3, 2018; Maarten Floris de Wilde , Comparing Tax Policy Responses for the Digitalizing Economy: Fold or All-in, Croner-i.co.uk, Volume 46, Issue 6/7, 2018; Digital Taxation Opens the Pandora Box: The OECD Interim Report and the European Commission Proposals, Croner-i.co.uk, Volume 46, Issue 6/7, 2019. Also see, Alex Gray, These are the world’s 10 biggest corporate giants, World Economic Forum (weforum.org), January 16, 2017; Companies: The rise of the superstars, The Economist, September 17, 2016; Mark Sweney, Amazon paid just £15m in tax on European revenues of £19.5bn, Guardian, August 10, 2017; Francine McKenna, Amazon Minimizes Profits Because CEO Jeff Bezos Hates Paying Taxes, Medium.com, September 29, 2014.

[2] Digital Taxation Opens the Pandora Box: The OECD Interim Report and the European Commission Proposals, Croner-i.co.uk, Volume 46, Issue 6/7, 2019.

[3] Alex Shephard, Is Amazon Too Big to Tax?, The New Republic, March 1, 2018.

[4] For example, fragmenting operations among multiple group entities, maintaining a minimum physical presence in tax havens, operating in market countries through a digital presence but limited or no physical presence, tax avoidance schemes involving base erosion and profit shifting.

[5] Neha Gupta, Is This The End of Tax Avoidance for Tech Giants, Google, Amazon, Apple, and Facebook?, Yahoo Finance, January 8, 2018.

[6] Digital Taxation Opens the Pandora Box: The OECD Interim Report and the European Commission Proposals, Croner-i.co.uk, Volume 46, Issue 6/7, 2019; Preventing the Artificial Avoidance of Permanent Establishment Status – Action 7: 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, 2015; Georg Kofler, Gunter Mayr, and Christoph Schlager, Taxation of the Digital Economy: ‘Quick Fixes’ or Long-Term Solution?, European Taxation (ibfd.org), December 2017; Peter Hongler and Pasquale Pistone, Blueprints for a New PE Nexus to Tax Business Income in the Era of the Digital Economy, IBFD White Paper (ibfd.org), January 20, 2015; Sean O’Reilly and Neil Nolan, The EU Commission urges digital taxation reform, Ronan Daly Jermyn (rdj.ie), November 20, 2011.  Also see generally, Unequal taxation in a digital world: a challenge for the Nordic media industry, PwC (pwc.no), May 2017.

[7] Preventing the Artificial Avoidance of Permanent Establishment Status – Action 7: 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, 2015. Also see generally: Georg Kofler, Gunter Mayr, and Christoph Schlager, Taxation of the Digital Economy: ‘Quick Fixes’ or Long-Term Solution?, European Taxation (ibfd.org), December 2017; Peter Hongler and Pasquale Pistone, Blueprints for a New PE Nexus to Tax Business Income in the Era of the Digital Economy, IBFD White Paper (ibfd.org), January 20, 2015; Sean O’Reilly and Neil Nolan, The EU Commission urges digital taxation reform, Ronan Daly Jermyn (rdj.ie), November 20, 2011.  Also see generally, Unequal taxation in a digital world: a challenge for the Nordic media industry, PwC (pwc.no), May 2017.

[8] Addressing the Tax Challenges of the Digital Economy, Action 1 – 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, 2015.

[9] Betsy Atkins, How Do You Make Digital Oversight Work in the Boardroom?, Corporate Counsel, January 7, 2019 (“If every business today is a digital business, that means every role your board plays must now become part of its digital governance”); Kathi Kruse, 6 Reasons Every Business Needs a Digital Strategy, Kruse Control, August 23, 2018; Every Business is a Digital Business, Knowledge@Wharton, Wharton University of Pennsylvania, August 8, 2017; Jia Wertz, Digital Transformations is Critical for Business Development, Forbes, May 16, 2018.

[10] Digital Taxation Opens the Pandora Box: The OECD Interim Report and the European Commission Proposals, Croner-i.co.uk, Volume 46, Issue 6/7, 2019.

[11] Sean O’Reilly and Neil Nolan, The EU Commission urges digital taxation reform, Ronan Daly Jermyn (rdj.ie), November 20, 2011.

[12] Tax challenges arising from digitalisation – Interim Report 2018, Eurofound.europa.eu, September 5, 2018; Tax Challenges Arising from Digitalisation – Interim Report 2018: Inclusive Framework on BEPS, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, 2018; Brief on the Tax Challenges Arising from Digitalisation: Interim Report 2018, oecd.org; 3 ways digitalisation is shaping the future of taxation, International Chamber of Commerce (iccwbo.org), March 7, 2018; Ashley Greenback and Riannon Kinghall Were, Taxing clicks: the European Commission’s new digital tax, Practical Law (uk.practicallaw.thomsonreuters.com), May 3, 2018; Maarten Floris de Wilde , Comparing Tax Policy Responses for the Digitalizing Economy: Fold or All-in, Croner-i.co.uk, Volume 46, Issue 6/7, 2018; Digital Taxation Opens the Pandora Box: The OECD Interim Report and the European Commission Proposals, Croner-i.co.uk, Volume 46, Issue 6/7, 2019.

[13] Alex Cobham and Petr Jansky, Global distribution of revenue loss from tax avoidance: Re-estimation and country results, WIDER Working Paper 2017/55, United Nations University World Institute for Development Economics Research (wider.unu.edu), March 2017; Ernesto Crivelli, Ruud De Mooij and Michael Keen, IMF Working Paper: Base Erosion, Profit Shifting, and Developing Countries, WP15/118, International Monetary Fund, May 2015; Jane Gravelle, Tax Havens: International Tax Avoidance and Evasion, Washington, DC: Congressional Research Service, 2015; Sophie Perryer, Top 5 tax scandals, World Finance.com, October 16, 2018; Jane Gravelle, Tax Havens: International Tax Avoidance and Evasion, National Tax Journal, Vol. 62, 2009.

[14] Annet Wanyana Oguttu, Tax Base Erosion and Profit Shifting in Africa – Part 1: Africa’s Response to the OECD BEPS Action Plan, ICTD Working Paper 54, The International Centre for Tax and Development, 2016; Action Plan on Base Erosion and Profit Shifting, OECD Publishing, 2013; Tax Challenges Arising from Digitalisation – Interim Report 2018: Inclusive Framework on BEPS, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, 2018; Brief on the Tax Challenges Arising from Digitalisation: Interim Report 2018, oecd.org; OECD Work on Taxation: 2018-2019, The Organisation for Economic Co-operation and Development (oecd.org), 2018; Addressing the Tax Challenges of the Digital Economy, Action 1 – 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, 2015; Tax Challenges of Digitalisation, Comments Received on the Request for Input – Part II, OECD.org, October 25, 2017; Mark Sweney, Amazon paid just £15m in tax on European revenues of £19.5bn, Guardian, August 10, 2017.

[15] Alex Shephard, Is Amazon Too Big to Tax?, The New Republic, March 1, 2018.

[16] Sean O’Reilly and Neil Nolan, The EU Commission urges digital taxation reform, Ronan Daly Jermyn (rdj.ie), November 20, 2011; Discussion on Corporate Taxation Challenges of the Digital Economy, Presidency Issues Note for the Informal ECOFIN Tallinn, September 16, 2017.

[17] Tax challenges arising from digitalisation – Interim Report 2018, Eurofound.europa.eu, September 5, 2018; Tax Challenges Arising from Digitalisation – Interim Report 2018: Inclusive Framework on BEPS, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, 2018; Brief on the Tax Challenges Arising from Digitalisation: Interim Report 2018, oecd.org; 3 ways digitalisation is shaping the future of taxation, International Chamber of Commerce (iccwbo.org), March 7, 2018; Ashley Greenback and Riannon Kinghall Were, Taxing clicks: the European Commission’s new digital tax, Practical Law (uk.practicallaw.thomsonreuters.com), May 3, 2018.

[18] Annet Wanyana Oguttu, Tax Base Erosion and Profit Shifting in Africa – Part 1: Africa’s Response to the OECD BEPS Action Plan, ICTD Working Paper 54, The International Centre for Tax and Development, 2016. Also see, What is BEPS, Transfer Pricing Asia.com, January 29, 2017:

“BEPS is an abbreviation of four words. BEPS stands for: Base Erosion and Profit Shifting. This in turn refers to two common practices for multinationals to lower the taxes that they pay (notably: corporate taxes).

  • “Base erosion” refers to the practice of reducing the taxable base. An example is deducting large interest payments in order to lower the taxable profits.
  • “Profit shifting” refers to the practice of shifting taxable profits from high-tax countries to low-tax countries. An example is the transfer of ownership of intellectual property and its income from the US (high-tax) to Bermuda (low-tax).

International organizations like the OECD have labeled Base Erosion and Profit Shifting as a major issue. This leads us to the other way in which the word “BEPS” is often used. …

To refer to the set of rules being implemented worldwide to combat the practice of base erosion and profit shifting, which is considered harmful.”

[19] 2018 Edelman Trust Barometer Global Report, Edelman.com; Margie Warrell, Who Can We Trust? Restoring Trust in our Institutions, Our Leaders and Each Other, Forbes, September 30, 2018; David Ryan, Do the right thing: Why business should fight for trust in the Age of Trump, Globe and Mail, November 19, 2018. Also see: Uri Friedman, Trust is Collapsing in America: when truth itself feels uncertain, how can a democracy be sustained?, The Atlantic, January 21, 2018; Christine Lagarde, The Role of Business in Supporting a more Inclusive Global Economy, Conference on Inclusive Capitalism, New York, International Monetary Fund, October 10, 2016; Klaus Schwab, Five Leadership priorities for 2017, World Economic Forum, January 2, 2017; Richard Edelman, A crisis of trust: A warning to both business and government, Economist, The World In.com, 2016; Jim Norman, Americans’ Confidence in Institutions Stays Low, Gallup.com, June 13, 2016; Clare Malone, Americans Don’t Trust Their Institutions Anymore, FiveThirtyEight, November 16, 2016; Jake Johnson, As Millions of Workers Face Pension Cuts Thanks to Wall Street Greed, Executive Benefits Remain Lavish, Common Dreams.org, April 29, 2016; Matt Taibbi, Looting the Pension Funds, Rolling Stone, September 26, 2013; M.B., Busted Trust: Faith in world leaders, Economist, January 23, 2012; James Crisp, Juncker admits Europeans have lost faith in the EU, EurActiv.com, April 19, 2016; Nathaniel Persily and Jon Cohen, Americans are losing faith in democracy – and in each other, Washington Post, October 14, 2016; Saskia Brechenmacher, Comparing Democratic Distress in the United States and Europe, Carnegie Endowment.org, June 21, 2018.

[20] Christine Lagarde, The Role of Business in Supporting a more Inclusive Global Economy, Conference on Inclusive Capitalism, New York, International Monetary Fund, October 10, 2016; A Broken Social Elevator? How to Promote Mobility, Organization for Economic Co-operation and Development, OECD Publishing, June 2018; The Framework for Policy Action on Inclusive Growth, Meeting of the OECD Council at Ministerial Level, Organization for Economic Co-operation and Development, Paris, May 30-31, 2018. Also see: A perfectly timed book on populism: John Judis has written a powerful account of the forces shaking Europe and America, The Economist, December 3, 2016. See, John Judis, The Populist Explosion, 2016; Ronald Inglehart and Pippa Norris, Trump, Brexit, and the Rise of Populism: Economic Have-Nots and Cultural Backlash, Harvard Kennedy School of Government, HKS Faculty Research Working Paper Series, August 2016;  Jason Tashea, Access to justice gap? It’s the economy, ABA Journal, December 17, 2018; Nouriel Roubini, The Political Left and Right Are Being Upended by Globalization Politics, Huffington Post, August 23, 2016:

“The backlash against globalization is real and mounting in advanced economies. But it can be managed through policies that ensure that the benefits of globalization continue, that mitigates collateral damage to those who lose out and that makes losers more likely to eventually join the ranks of the winners.”

[21] Tom Monahan, Populism Unleashed: 5 Steps for Business Leaders to Shape a Healthy Society and Boost Performance, CEB Global, November 9, 2016; J. David Hulchanski and Richard Maaranen, Neighbourhood Socio-Economic Polarization & Segregation in Toronto: Trends and Processes since 1970, paper presented at ‘Urban Poverty and Segregation in a Globalized World’ international conference at Delft University, Netherlands, September 19-20, 2018; Jason Tashea, Access to justice gap? It’s the economy, ABA Journal, December 17, 2018; The American Middle Class is Losing Ground: no longer the majority and falling behind financially, Pew Research Center, December 9, 2015; Klaus Schwab, Five Leadership priorities for 2017, World Economic Forum, January 2, 2017.  Also see, Annie Lowrey, 2016: A Year Defined by America’s Diverging Economies, The Atlantic, December 30, 2016; Ronald Inglehart and Pippa Norris, Trump, Brexit, and the Rise of Populism: Economic Have-Nots and Cultural Backlash, Harvard Kennedy School of Government, HKS Faculty Research Working Paper Series, August 2016; Claire Cain Miller, The Relentlessness of Modern Parenting: raising children has become significantly more time-consuming and expensive, amid a sense that opportunity has grown more elusive, New York Times, December 25, 2018.

[22] Dambisa Moyo, Why the survival of democracy depends on a strong middle-class, Globe and Mail, April 20, 2018 (Canada). Also see, Thomas Walkom, Why, after years of ignoring tax havens, are governments paying attention?, Toronto Star, November 8, 2017; Viola Tanto, The International Company and Tax Avoidance, European Journal of Multidisciplinary Studies, Vol. 1, No. 6, Sep-Dec 2016 (PHD Candidate in Tax Law, Business and Private Law Department, European University of Tirana); Paige Szmodis, Paradise Papers reveal unethical tax avoidance by tech companies, The Ursinus Grizzly, November 13, 2017; Paul Gillespie, Tax avoidance by multinationals contributes to inequality and is in political firing line, Irish Times, September 3, 2016:

“Analysts discern a common pattern whereby those who have lost out in this game of capital globalisation demand the restoration of national controls, lost income and welfare and the closure of borders to immigration.”

[23] Duncan Ivison (Deputy Vice Chancellor, University of Sydney), Learning to be Human: Universities in a world of rising inequality and technological change, OECD-forum.org, May 3, 2018; David Ryan, Do the right thing: Why business should fight for trust in the Age of Trump, Globe and Mail, November 19, 2018.

[24] John Harris, Without a fair tax on tech, it could be the end of the state as we know it, The Guardian, November 11, 2018.

[25] Alex Cobham and Petr Jansky, Global distribution of revenue loss from tax avoidance: Re-estimation and country results, WIDER Working Paper 2017/55, United Nations University World Institute for Development Economics Research (wider.unu.edu), March 2017; Ernesto Crivelli, Ruud De Mooij and Michael Keen, IMF Working Paper: Base Erosion, Profit Shifting, and Developing Countries, WP15/118, International Monetary Fund, May 2015; Jane Gravelle, Tax Havens: International Tax Avoidance and Evasion, Washington, DC: Congressional Research Service, 2015; Sophie Perryer, Top 5 tax scandals, World Finance.com, October 16, 2018; Jane Gravelle, Tax Havens: International Tax Avoidance and Evasion, National Tax Journal, Vol. 62, 2009.

[26] Chris Nicholas, Twelve steps to stop tax avoidance, New Statesman, September 3, 2013.

[27] Wayne Swan, Tax avoidance impoverishes us all. Fighting it requires challenging the powerful, Guardian, January 11, 2016. Also see, What is BEPS, Transfer Pricing Asia.com, January 29, 2017:

“BEPS is an abbreviation of four words. BEPS stands for: Base Erosion and Profit Shifting. This in turn refers to two common practices for multinationals to lower the taxes that they pay (notably: corporate taxes).

  • “Base erosion” refers to the practice of reducing the taxable base. An example is deducting large interest payments in order to lower the taxable profits.
  • “Profit shifting” refers to the practice of shifting taxable profits from high-tax countries to low-tax countries. An example is the transfer of ownership of intellectual property and its income from the US (high-tax) to Bermuda (low-tax).

International organizations like the OECD have labeled Base Erosion and Profit Shifting as a major issue. This leads us to the other way in which the word “BEPS” is often used. …

To refer to the set of rules being implemented worldwide to combat the practice of base erosion and profit shifting, which is considered harmful.”

[28] Overhaul tax for the 21st century, The Economist, August 9, 2018.

[29] Alan Rappeport, Milan Schreuer, Jim Tankersley, and Natasha Singer, Europe’s Planned Digital Tax Heightens Tensions with U.S., New York Times, March 19, 2018; James Titcomb, Tech Giants face tax avoidance crackdown, Telegraph, November 22, 2017; Overhaul tax for the 21st century, The Economist, August 9, 2018; Alex Webb, U.K. Tech Tax Would Be Both Pointless and Essential, Bloomberg, October 29, 2018; David Pegg, From Seattle to Luxembourg: how tax schemes shaped Amazon, Guardian, April 25, 2018;

[30] James Yang and Victor Metallo, The Emerging International Taxation Problems, International Journal of Financial Studies, Vol. 6, Issue 1, 2018; Nick Statt, Google still exploiting tax loopholes to shelter billions in oversees ad revenue, The Verge, January 2, 2018; Jeremy Kahn, Google’s ‘Dutch Sandwich’ Shielded 16 Billion Euros From Tax, Bloomberg, January 2, 2018; Jesse Drucker, How Tax Bills Would Reward Companies that Moved Money Offshore, New York Times, November 29, 2017; Michael Erman and Tom Bergin, How U.S. tax reform rewards companies that shift profit to tax havens, Reuters, June 18, 2018.

[31] Jon Schwarz, Tax Havens and Other Dirty Tricks Let U.S. Corporations Steal $180 Billion From the Rest of the World Every Year, The Intercept, October 26, 2018. Also See, Thomas Wright and Gabriel Zucman, The Exorbitant Tax Privilege, National Bureau of Economic Research (NBER Working Paper Series), September 2018.

[32] Alex Cobham and Petr Jansky, Global distribution of revenue loss from tax avoidance: Re-estimation and country results, WIDER Working Paper 2017/55, United Nations University World Institute for Development Economics Research (wider.unu.edu), March 2017; Ernesto Crivelli, Ruud De Mooij and Michael Keen, IMF Working Paper: Base Erosion, Profit Shifting, and Developing Countries, WP15/118, International Monetary Fund, May 2015; Jane Gravelle, Tax Havens: International Tax Avoidance and Evasion, Washington, DC: Congressional Research Service, 2015; Sophie Perryer, Top 5 tax scandals, World Finance.com, October 16, 2018; Jane Gravelle, Tax Havens: International Tax Avoidance and Evasion, National Tax Journal, Vol. 62, 2009.

[33] Andrew Hill, Mehreen Khan, and Richard Waters, The global hunt to tax Big Tech, Financial Times, November 2, 2018.

[34] Stian Reimers, When it comes to tax, how do we decide what’s fair, The Conversation, April 8, 2016. Also see, Tom Bergin, UK targets tech giants over tax avoidance and VAT fraud, Reuters, November 22, 2017; David Pegg, From Seattle to Luxembourg: how tax schemes shaped Amazon, Guardian, April 25, 2018; Jonathan Chew, 7 Corporate Giants Accused of Evading Billions in Taxes, Fortune, March 11, 2016; Andrew Rettman, Top EU banks guilty or multi-billion tax fraud, EU Observer, October 19, 2018;

[35] Alan Rappeport, Milan Schreuer, Jim Tankersley, and Natasha Singer, Europe’s Planned Digital Tax Heightens Tensions with U.S., New York Times, March 19, 2018.

[36] Sol Picciotto (editor), Taxing Multinational Enterprises as Unitary Firms, Institute of Development Studies, 2017 (chapter 1, The Current Context and a Little History, Sol Picciotto); Jackie Ashley, Firms must pay their fair share of tax, Guardian, December 3, 2012; David Pring-Mill, Are Tech Companies Avoiding Taxes?, National Interest, February 8, 2018; Marco Chown Oved, Canada Revenue Agency is tough on regular taxpayers but goes easy on those with offshore accounts, audit finds, Toronto Star, November 20, 2018.

[37] Editorial, The Guardian view on taxing the digital economy: crunch time, Guardian, October 4, 2018. Also see, Frederic Filloux, The Yellow Vests could cost the tech giants billions, Monday Note.com, December 16, 2018; Andrew Trotman, Apple founder Steve Wozniak: public anger at tax arrangements is ‘warranted’, Telegraph, May 30, 2013 (“… in order to make the tax system fairer, companies must pay tax on what they earn, as individuals do, rather than profits”.); Mark Sweney, Amazon paid just £15m in tax on European revenues of £19.5bn, Guardian, August 10, 2017; Francine McKenna, Amazon Minimizes Profits Because CEO Jeff Bezos Hates Paying Taxes, Medium.com, September 29, 2014; Alex Shephard, Is Amazon Too Big to Tax?, The New Republic, March 1, 2018.

[38] Action Plan on Base Erosion and Profit Shifting, OECD Publishing, 2013; Digital Taxation Opens the Pandora Box: The OECD Interim Report and the European Commission Proposals, Croner-i.co.uk, Volume 46, Issue 6/7, 2019; Nancy Manzano, Bernadette Pinamont, and George Salis, Making the case for a global tax transformation, World Finance.com, January 23, 2018; Kamal Ahmed, EU pushes for new tax on tech giants ‘by Christmas’, BBC.com, October 10, 2018; Fair Taxation of the Digital Economy, ec.europa.eu, March 21, 2018; Luca Cerioni, The European Union and Direct Taxation: A Solution for a Difficult Relationship, Routledge (Taylor & Francis Group), 2015.

[39] Lara Coelho Nogueira, European Commission’s proposal to implement a new permanent establishment nexus based on significant digital presence: is it compliant with the EU Law and international tax principles?,  Masters Thesis, Master’s Programme in European and International Tax Law, Lund University (School of Economics and Management, Department of Law), June 2018. Also see, Addressing the Tax Challenges of the Digital Economy, Action 1 – 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, 2015; Tax Challenges Arising from Digitalisation – Interim Report 2018: Inclusive Framework on BEPS, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, 2018.

[40] Alex Shepard, Is Amazon Too Big to Tax?, New Republic, March 1, 2018. Also see, Manuela Tobias, Bernie Sanders says Amazon paid no federal income tax in 2017. He’s right, PolitiFact.com, May 3, 2018.

[41] See for example, Andrew Trotman, Apple founder Steve Wozniak: public anger at tax arrangements is ‘warranted’, Telegraph, May 30, 2013 (“… in order to make the tax system fairer, companies must pay tax on what they earn, as individuals do, rather than profits”.); Mark Sweney, Amazon paid just £15m in tax on European revenues of £19.5bn, Guardian, August 10, 2017; Francine McKenna, Amazon Minimizes Profits Because CEO Jeff Bezos Hates Paying Taxes, Medium.com, September 29, 2014; Alex Shephard, Is Amazon Too Big to Tax?, The New Republic, March 1, 2018.

[42] Viktoria Dendrinou, American Tech Giants Face New Tax Grab in Europe, Bloomberg, March 20, 2018.

[43] Nick Miller, New ‘tech giant tax’ to stop Facebook, Amazon taking profits overseas, Sydney Morning Herald, October 30, 2018.

[44] Rohitesh Dhawan and Sean West, The CEO as Chief Geopolitical Officer, KPMG.com, 2018. Also see, 10 biggest corporations make more money than most countries in the world combined, Global Justice Now, September 12, 2016. In addition, see: Robin Wigglesworth, Larry Fink identifies China as critical BlackRock priority, Financial Times, April 8, 2018; Nyshka Chandran, Hopes are high for China to announce market access reforms on Tuesday, CNBC, April 9, 2018; Amazon corporation and its CEO Jeff Bezo: Flora Carr, Amazon Is Now More Valuable Than Microsoft and Only 2 Other Companies Are Worth More, Fortune, February 15, 2018; Kate Vinton, Amazon CEO Jeff Bezos is the Richest Person in the World, Forbes, October 27, 2017; Chris Isidore, Jeff Bezos is the richest person in history, CNN, January 9, 2018; Ben Schiller, Is Amazon Killing Jobs and Destroying Communities? At what cost does convenience come? A new report says it’s not just jobs, but the rest of the economy as well, Fast Company, December 2, 2016; Olivia LaVecchia and Stacy Mitchell, Amazon’s Stranglehold: How the Company’s Tightening Grip Is Stifling Competition, Eroding Jobs, and Threatening Communities, Institute for Local Self-Reliance, November 2016; Alexei Oreskovic, Amazon just became the world’s most valuable company, ending Microsoft’s spot at the top after 5 weeks, Business Insider, January 7, 2019; David Pegg, The tech giants will never pay their fair share of taxes – unless we make them, The Guardian, December 11, 2017: “… Apple’s $252bn offshore cash pile, as exposed by the Paradise Papers investigation. More valuable than the foreign currency reserves of the US or the UK, it represents all the money that the world’s most valuable company has siphoned out of the global financial system for the benefit of its shareholders.”

[45] See generally, Mark Sweney, Amazon paid just £15m in tax on European revenues of £19.5bn, Guardian, August 10, 2017; Michael Rapoport, What Amazon Isn’t Telling Investors About Its Revenue, Wall Street Journal, December 22, 2018; Sol Picciotto (editor), Taxing Multinational Enterprises as Unitary Firms, Institute of Development Studies, 2017 (chapter 2, Unitary Alternatives and Formulary Appointment, Sol Picciotto).

[46] For example, see: Sean O’Reilly and Neil Nolan, The EU Commission urges digital taxation reform, Ronan Daly Jermyn (rdj.ie), November 20, 2011; Discussion on Corporate Taxation Challenges of the Digital Economy, Presidency Issues Note for the Informal ECOFIN Tallinn, September 16, 2017;

[47] Georg Kofler, Gunter Mayr, and Christoph Schlager, Taxation of the Digital Economy: ‘Quick Fixes’ or Long-Term Solution?, European Taxation (ibfd.org), December 2017; Peter Hongler and Pasquale Pistone, Blueprints for a New PE Nexus to Tax Business Income in the Era of the Digital Economy, IBFD White Paper (ibfd.org), January 20, 2015. See generally, Eli Hadzhieva, Tax Challenges in the Digital Economy, Directorate-General for Internal Policies, European Parliament, 2016; Marcel Olbert and Christoph Spengel, International Taxation in the Digital Economy: Challenge Accepted?, World Tax Journal, February 2017; Arthur Cockfield, Reforming the Permanent Establishment Principle Through Quantitative Economic Presence Test, 38 Can. Bus. L. J. 400, 2003; Lara Coelho Nogueira, European Commission’s proposal to implement a new permanent establishment nexus based on significant digital presence: is it compliant with the EU Law and international tax principles?,  Master’s Thesis, Master’s Programme in European and International Tax Law, Lund University (School of Economics and Management, Department of Law), June 2018.

[48] Digital Taxation Opens the Pandora Box: The OECD Interim Report and the European Commission Proposals, Croner-i.co.uk, Volume 46, Issue 6/7, 2019; Georg Kofler, Gunter Mayr, and Christoph Schlager, Taxation of the Digital Economy: ‘Quick Fixes’ or Long-Term Solution?, European Taxation (ibfd.org), December 2017; Peter Hongler and Pasquale Pistone, Blueprints for a New PE Nexus to Tax Business Income in the Era of the Digital Economy, IBFD White Paper (ibfd.org), January 20, 2015. Also see, Preventing the Artificial Avoidance of Permanent Establishment Status – Action 7: 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, 2015.

[49] See generally: John Harris, Without a fair tax on tech, it could be the end of the state as we know it, The Guardian, November 11, 2018; Sol Picciotto and Nicholas Shaxson, Make Corporate tax rules fair for all, Financial Times, November 19, 2012; Sol Picciotto, Taxing Multinational Enterprises as Unitary Firms, International Centre for Tax and Development, June 2016; Sol Picciotto (editor), Taxing Multinational Enterprises as Unitary Firms, Institute of Development Studies, 2017; Corporate Tax: Going After Google, The Economist, January 28, 2016; Rosanne Altshuler and Harry Grubert, Formula Apportionment: Is It Better Than the Current System and Are There Better Alternatives?, National Tax Journal, Volume 63, Issue 4, 2010; Reuven S. Avi-Yonah and Kimberly A. Clausing, Reforming Corporate Taxation in a Global Economy: A Proposal to Adopt Formulary Apportionment, Discussion paper, Washington, DC: The Hamilton Project, 2007; Digital Taxation Opens the Pandora Box: The OECD Interim Report and the European Commission Proposals, Croner-i.co.uk, Volume 46, Issue 6/7, 2019; Tas Bindi, EU launches public consultation on tax regime for tech companies: The European Commission is looking to implement a fairer, more effective, and unified tax regime next year that makes sense in the digital age, ZDnet.com, October 27, 2017; Corinne Reichert, Germany wants to halt US tech giant tax evasion: Report, ZDnet.com, October 22, 2018.Also see, for example, see: Tax challenges arising from digitalisation – Interim Report 2018, Eurofound.europa.eu, September 5, 2018; Tax Challenges Arising from Digitalisation – Interim Report 2018: Inclusive Framework on BEPS, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, 2018; Brief on the Tax Challenges Arising from Digitalisation: Interim Report 2018, oecd.org; 3 ways digitalisation is shaping the future of taxation, International Chamber of Commerce (iccwbo.org), March 7, 2018; Ashley Greenback and Riannon Kinghall Were, Taxing clicks: the European Commission’s new digital tax, Practical Law (uk.practicallaw.thomsonreuters.com), May 3, 2018.

[50] Nancy Manzano, Bernadette Pinamont, and George Salis, Making the case for a global tax transformation, World Finance.com, January 23, 2018; David Pegg, The tech giants will never pay their fair share of taxes – unless we make them, The Guardian, December 11, 2017; Gabriel Zucman, How Corporations and the Wealthy Avoid Taxes (and How to Stop Them), New York Times, November 10, 2017.

[51] Sol Picciotto (editor), Taxing Multinational Enterprises as Unitary Firms, Institute of Development Studies, 2017 (chapter 3, A Practical Approach to a Transition to Formulary Apportionment, Michael C. Durst). Also see, Michael C. Durst, The Tax Policy Outlook for Developing Countries: Reflections on International Formulary Apportionment, ICTD Working Paper 32, The International Centre for Tax and Development, 2015.

[52] Press Release: New Taxwatch report estimates UK is losing £1bn a year in taxes to profit shifting by just 5 companies, Tax Watch (taxwatchuk.org), October 28, 2018.

[53] Business Among Friends: Why corporate tax dodgers are not yet losing sleep over global tax reform, Oxfam.org, May 2014 (“the business lobby currently has a disproportionate influence on the process, which it uses to protect its interests“);Simon Bowers, US tech giants launch fierce fightback against global tax avoidance crackdown – lobbyists representing firms including Google, Amazon and Apple claim ‘fundamental flaws’ in G20-led reforms, Guardian, January 21, 2015; Eric Sigurdson, Corporate Strategy and Geopolitical Risk in a G-Zero World: Inequality, Polarized Democracies, and the shifting economic and political landscape, Sigurdson Post, May 31, 2018; Ivana Kottasova, Big Tech’s next European nightmare: A tax on revenues, CNN, October 31, 2018; Alex Webb, U.K. Tech Tax Would Be Both Pointless and Essential, Bloomberg, October 29, 2018 (“It goes without saying that there’s staunch opposition from the U.S.”); Jennifer Rankin, Facebook, Google and Amazon could pay ‘fair’ tax under EU plans: tech firms would pay wherever they have digital presence, regardless of staff location, The Guardian, March 21, 2018; Alan Rappeport, Milan Schreuer, Jim Tankersley, and Natasha Singer, Europe’s Planned Digital Tax Heightens Tensions with U.S., New York Times, March 19, 2018; Jim Waterson and Alex Hern, Hammond’s digital tax faces opposition from big tech firms, Guardian, October 30, 2018.

[54] Andrew Hill, Mehreen Khan, and Richard Waters, The global hunt to tax Big Tech, Financial Times, November 2, 2018; Liz Alderman, France, Not Waiting for European Union, To Tax U.S. Tech Firms as ’19 Starts, New York Times, December 18, 2018; Nikos Chrysoloras, Tech Tax Advocates Prepare Last-Ditch Push for EU Deal, Bloomberg, November 25, 2018; James Titcomb and Hannah Boland, Apple, Uber and Airbnb in firing line of tech tax, The Telegraph, November 3, 2018; Alex Webb, U.K. Tech Tax Would Be Both Pointless and Essential, Bloomberg, October 29, 2018; Madison Marriage and Aliya Ram, Big Tech faces UK tax on revenues, not profits, Financial Times, February 22, 2018; Mehreen Khan, Alex Barker, and Rochelle Toplensky, Google, Facebook, and Apple face ‘digital tax’ on EU turnover, Financial Times, March 15, 2018; Nils Pratley, UK finally takes on arrogant tech giants with digital services tax, Guardian, October 29, 2018; Timothy Martin and Sam Schechner, Facebook, Google May Face Billions in New Taxes Across Asia, Latin America: Europe’s proposal to impose a new tax on tech giants is inspiring other governments, Wall Street Journal, October 28, 2018; Corporate tax and the digital economy: position paper, HM Treasury (assets.publishing.service.gov.uk), November 2017.

[55] Nancy Manzano, Bernadette Pinamont, and George Salis, Making the case for a global tax transformation, World Finance.com, January 23, 2018; Alan Rappeport, Milan Schreuer, Jim Tankersley, and Natasha Singer, Europe’s Planned Digital Tax Heightens Tensions with U.S., New York Times, March 19, 2018; Frederic Filloux, The Yellow Vests could cost the tech giants billions, Monday Note.com, December 16, 2018.

[56] Digital Taxation Opens the Pandora Box: The OECD Interim Report and the European Commission Proposals, Croner-i.co.uk, Volume 46, Issue 6/7, 2019.

[57] Digital Taxation Opens the Pandora Box: The OECD Interim Report and the European Commission Proposals, Croner-i.co.uk, Volume 46, Issue 6/7, 2019.

[58] Adam Bienkov, The UK government admits Brexit will inevitably leave Britain poorer, Business Insider, November 28, 2018; Ronald Inglehart and Pippa Norris, Trump, Brexit, and the Rise of Populism: Economic Have-Nots and Cultural Backlash, Harvard Kennedy School of Government, HKS Faculty Research Working Paper Series, August 2016; Victor Li, The top legal stories of 2016: Do you have others?, ABA Journal, December 23, 2016; Paul Waldie, ‘A failed, second-tier Canadian politician’: Mark Carney’s dire Brexit warnings earn the wrath of British politicians, Globe and Mail, November 29, 2018.

[59] Luke Harding, Reporting on Trump and Putin amid the war on truth, The Guardian, October 13, 2018; Telegraph View, We need a tax system that is clear and fair, Telegraph.co.uk, May 14, 2014; David Martin, Why the American Dream is More Attainable in Canada than in the U.S., Huffington Post, November 28, 2018; Saskia Brechenmacher, Comparing Democratic Distress in the United States and Europe, Carnegie Endowment.org, June 21, 2018. Also see, Eric Sigurdson, Corporate Strategy and Geopolitical Risk in a G-Zero World: Inequality, Polarized Democracies, and the shifting economic and political landscape, Sigurdson Post, May 31, 2018.

[60] Overhaul tax for the 21st century, The Economist, August 9, 2018.

[61] Wayne Swan, Tax avoidance impoverishes us all. Fighting it requires challenging the powerful, Guardian, January 11, 2016.

[62] Wayne Swan, Tax avoidance impoverishes us all. Fighting it requires challenging the powerful, Guardian, January 11, 2016.

[63] Andrew Hill, Mehreen Khan, and Richard Waters, The global hunt to tax Big Tech, Financial Times, November 2, 2018. Also see, David Leonhardt, The Corporate Donors Behind a Republican Power Grab, New York Times, December 9, 2018. 

[64] Stephen Kobrin, Multinational Corporations, the Protest Movement and the Future of Global Governance, Chapter 9 in A. Chandler and B. Mazlish (editors), Leviathans: Multinational Corporations and the New Global History, Cambridge University Press, 2005.

[65] Daniel P. Tokaji, A Toxic Brew: Judicial Elections in the Age of Big-Money Politics, in The Politicization of Judicial Elections and Its Effect on Judicial Independence, 60 Cleveland State Law Review 461, 2012.

[66] See Eric Sigurdson, Corporate Strategy and Geopolitical Risk in a G-Zero World: Inequality, Polarized Democracies, and the shifting economic and political landscape, Sigurdson Post, May 31, 2018, endnotes #123 and #130 for specific references for the U.S., UK, Australia, EU, and Canada.  Also see, Jeffrey Sachs, Scott Pruitt sums up America’s big challenge, CNN, April 10, 2018; Jane Mayer, Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right, First Anchor Books Edition, 2016, 2017 (preface); George Tyler, Billionaire Democracy: The Hijacking of the American Political System, BenBella Books, 2018; Fredreka Schouten, Exclusive: Three-quarters of the secret money in recent elections came from 15 groups, USA Today, September 12, 2018; Michael Beckel, Dark Money Illuminated, Issue One (issueone.org), 2018; Tim Dunlop, Three things must change for a healthier democracy, ABC.net.au, October 17, 2014. Also see, for example: Charles Kaiser, Dark Money review: Nazi oil, the Koch brothers and a rightwing revolution, The Guardian, January 17, 2016; Daniel Ben-Ami, Book Review: ‘Dark Money’, by Jane Mayer, Financial Times, March 11, 2016;Donald Gutstein, Harperism: How Stephen Harper and his think tank colleagues have transformed Canada, James Lorimer & Company Publishers, 2014; Daphne Bramham, Lessons for Canada from how the Koch brothers hijacked democracy, Vancouver Sun, September 25, 2016;Alan Ehrenhalt, ‘Dark Money’, by Jane Mayer, New York Times, January 19, 2016; Tim Roemer and Zach Wamp, John McCain’s warning about dark money is real. Stop campaign finance corruption, USA Today, May 8, 2018.

[67] Matthew Yglesias, American democracy is doomed, Vox, October 8, 2015; David Moss, Fixing What’s Wrong with U.S. Politics, Harvard Business Review, March 2012.

[68] As noted by the New York Times, “if you think globalization, immigration, trade and demographic change have contributed to displacement and political anger, wait until robots take away millions and millions of jobs, including those requiring the use of a well-trained brain” [Anand Giridharadas, When Technology Sets off a Populist Revolt, New York Times, August 29, 2016].  Until recently, technology has been an often overlooked—but significant—factor, and going forward you can expect technology to change the economy even more than globalization [Simon Veazey, The Impact of Technology’s Invisible Hand, Epoch Times, October 28, 2016; Hadi Partovi, A trillion-dollar opportunity for America, LinkedIn, January 9, 2017]. Federal Reserve Chair Janet Yellen has noted that globalization and technology has “reinforced the shift away from lower-skilled jobs that require less education, to higher-skilled jobs that require college and advanced degrees,” and that “the jobs that globalization creates” – serving a global economy of billions of people – “are more likely to be filled by those who have secured the advantage of higher education” [Akin Oyedele, Trump could be looking at the job market all wrong, Business Insider, January 8, 2017].

[69] Caitlin Zaloom, Does the U.S. Still Have a ‘Middle Class’?: White-collar work today is fundamentally insecure, The Atlantic, November 4, 2018; Stephen Harper, Populism’s rise points to real problems in our world. We ignore them at our peril, Globe and Mail, October 6, 2018; Overhaul tax for the 21st century, The Economist, August 9, 2018; Daniel Tencer, OECD Report Warns of ‘Unprecedented Wage Stagnation’ in Developed Countries, Huffington Post, July 9, 2018; Pedro Nicolaci da Costa, There’s one simple explanation for the wage stagnation ‘puzzle’ confounding top Fed officials, Business Insider, August 29, 2018; Steve Johnson, Global unemployment hits lowest point for 4 decades: UBS survey highlights impact of labour flexibility, lower wages and interest rates, Financial Times, December 5, 2018; Leonid Bershidsky, Underemployment is the New Unemployment: Western countries are celebrating low joblessness, but much of the new work is precarious and part-time, Bloomberg, September 26, 2018; Suresh Naidu, Eric Posner, and Glen Weyl, More and more companies have monopoly power over workers’ wages. That’s killing the economy, Vox, April 6, 2018; Nick Hanauer, To My Fellow Plutocrats: You Can Cure Trumpism – pay your workers a decent wage, Politico.com, July 18, 2017; Aleksandra Sagen, Loblaw shareholders reject proposal to study feasibility of paying a living wage, Globe and Mail, May 3, 2018; Jesse M. Fried (Harvard Law School) and Charles C.Y. Wang (Harvard Business School), Short-Termism and Capital Flows, Working Paper 17-062, 2017; Amy Minsky, Average hourly wages in Canada have barely budged in 40 years, Global News, June 15, 2017; Drew DeSilver, For most U.S. workers, real wages have barely budged in decades, Pew Research Center, August 7, 2018.  Note: re wage stagnation also see – Stephen J. Rose, How Different Studies Measure Income Inequality in the US: Piketty and Company Are Not the Only Game in Town, Income and Benefits Policy Center, Urban Institute (urban.org), December 2018.

[70] The economic inequality perspective — emphasizes the consequences for electoral behavior arising from profound changes transforming the workforce and society in post-industrial economies. There is overwhelming evidence of powerful trends toward greater income and wealth inequality in the West, based on the rise of the knowledge economy, technological automation, and the collapse of manufacturing industry, global flows of labor, goods, peoples, and capital (especially the inflow of migrants and refugees), the erosion of organized labor, shrinking welfare safety-nets, and neo-liberal austerity policies.  According to this view, rising economic insecurity and social deprivation among the left-behinds has fueled popular resentment of the political classes. This situation is believed to have made the less secure strata of society – low-waged unskilled workers, the long-term unemployed, households dependent on shrinking social benefits, residents of public housing, single-parent families, and poorer white populations living in inner-city areas with concentrations of immigrants– susceptible to the anti-establishment, nativist, and xenophobic scare-mongering exploited of populist movements, parties, and leaders, blaming ‘Them’ for stripping prosperity, job opportunities, and public services from ‘Us’. [Ronald Inglehart and Pippa Norris, Trump, Brexit, and the Rise of Populism: Economic Have-Nots and Cultural Backlash, Harvard Kennedy School of Government, HKS Faculty Research Working Paper Series, August 2016]. Also see, Suresh Naidu, Eric Posner, and Glen Weyl, More and more companies have monopoly power over workers’ wages. That’s killing the economy, Vox, April 6, 2018.

[71] Caitlin Zaloom, Does the U.S. Still Have a ‘Middle Class’?: White-collar work today is fundamentally insecure, The Atlantic, November 4, 2018; Stephen Harper, Populism’s rise points to real problems in our world. We ignore them at our peril, Globe and Mail, October 6, 2018; Eric Sigurdson, Corporate Strategy and Geopolitical Risk in a G-Zero World: Inequality, Polarized Democracies, and the shifting economic and political landscape, Sigurdson Post, May 31, 2018.

[72] Rana Dasgupta, The demise of the nation state, The Guardian, April 5, 2018. Also see, Hilary Matfess and Michael Miklaucic (editors), Beyond Convergence: World Without Order, Center for Complex Operations at National Defense University, 2016 (see, Chapter 2, Nils Gilman, The Twin Insurgencies: Plutocrats and Criminals Challenge the Westphalian State, etc).

[73] For example, see: Daisuke Wakabayashi and Brian Chen, Apple, Capitalizing on New Tax Law, Plans to Bring Billions in Cash Back to U.S., New York Times, January 17, 2018 (94% of Apple’s total cash of $269 billion held outside of the U.S., its home country); Gabriel Zucman, How Corporations and the Wealthy Avoid Taxes (and How to Stop Them), New York Times, November 10, 2017.

[74] Robert Cribb and Marco Chown Oved, Panama Papers revelations have already delivered results: laying bare the secretive world of offshore finance, reports detailed the secretive flow of billions of dollars in a parallel offshore economy, The Toronto Star, December 11, 2016; FT View, Stranger than paradise: the truth about taxes, Financial Times, November 10, 2017; Juliette Garside, Paradise Papers leak reveals secrets of the world elite’s hidden wealth: files from offshore law firm show financial dealings of the Queen, big multinationals and members of Donald Trump’s cabinet, The Guardian, November 5, 2017.

[75] Stephen Kobrin, Multinational Corporations, the Protest Movement and the Future of Global Governance, Chapter 9 in A. Chandler and B. Mazlish (editors), Leviathans: Multinational Corporations and the New Global History, Cambridge University Press, 2005.

[76] Eric Sigurdson, Corporate Strategy and Geopolitical Risk in a G-Zero World: Inequality, Polarized Democracies, and the shifting economic and political landscape, Sigurdson Post, May 31, 2018. Also see, Business Among Friends: Why corporate tax dodgers are not yet losing sleep over global tax reform, Oxfam.org, May 2014; Mike Crawley, Ford Government’s top political staff hold ‘secretive’ meeting with business leaders: ‘refrain from mentioning this event on social media’, Ontario Chamber of Commerce tells invitees, CBC News, December 6, 2018; Martin Lukacs, Doug Ford isn’t ‘for the little guy’ – he’s a mercenary for the millionaire class, Guardian, May 25, 2018.

[77] Saskia Brechenmacher, Comparing Democratic Distress in the United States and Europe, Carnegie Endowment.org, June 21, 2018; Sinead Baker, Alexandria Ocasio-Cortez slams Harvard orientation for freshman lawmakers as ‘lobbyist project’ that hypes tax cuts for corporations, Business Insider, December 10, 2018.

[78] ICYMI: Sen. Cruz: It’s Time to Break the Washington Cartel – delivers speech exposing big government, bug business cronyism, U.S. Senator for Texas Ted Cruz (cruz.senate.gov), June 24, 2015. Also see, Jon Schwarz, ‘Yes, We’re Corrupt’: A List of Politicians Admitting That Money Controls Politics, The Intercept, July 30, 2015.

[79] Al Gore, The Future: Six Drivers of Global Change, Random House Publishing Group, 2013. Also see, Jon Schwarz, ‘Yes, We’re Corrupt’: A List of Politicians Admitting That Money Controls Politics, The Intercept, July 30, 2015.

[80] Anup Shah, Tax Avoidance and Tax Havens; Undermining Democracy, Global Issues.org, January 7, 2013; Is Sweeping Reform Necessary, Tax Me If You Can, Frontline, PBS, February 19, 2004.

[81] Lawrence Lessig, Mick Mulvaney shows why we need to radically change our elections, Washington Post, April 29, 2018. Also see, Amy Melissa McKay, Fundraising for Favors? Linking Lobbyist-Hosted Fundraisers to Legislative Benefits, Political Research Quarterly (journals.sagepub.com), April 24, 2018; Jane Mayer, Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right, First Anchor Books Edition, 2016, 2017 (preface).

[82] Russ Feingold, US campaign finance laws resemble legalized bribery. We must reform them, Guardian, November 8, 2017.

[83] Rohitesh Dhawan and Sean West, The CEO as Chief Geopolitical Officer, KPMG.com, 2018. Also see, 10 biggest corporations make more money than most countries in the world combined, Global Justice Now, September 12, 2016. Also see, for example, see: Tim Roemer and Zach Wamp, John McCain’s warning about dark money is real. Stop campaign finance corruption, USA Today, May 8, 2018.

[84] Jeffrey Sachs, Scott Pruitt sums up America’s big challenge, CNN, April 10, 2018:

“The United States is not alone in this big-money corruption but perhaps has become its world leader. Democracy around the world is being undermined not by a working-class backlash or resurgent nationalism but by money, a lot of it. With the world’s politics awash in money, several world leaders are currently charged with corruption, most recently France’s Nicolas Sarkozy, Israel’s Benjamin Netanyahu, and South Africa’s Jacob Zuma, with two more recently convicted: Brazil’s Luiz Inacio Lula da Silva and South Korea’s Park Geun-Hye.”

[85] Simon Lee, Common Good, Encyclopaedia Britannica (Britannica.com). Also see, for example: Professor Michael Sandel, Towards a just society, The Guardian, February 20, 2010.

[86] U.S.: George Monbiot, How Corporate dark money is taking power on both sides of the Atlantic, The Guardian, February 2, 2017; Jacob Hacker and Nathan Loewentheil, How Big Money Corrupts the Economy, Democracy Journal.org, Winter 2013; Charles Wheelan, It’s Official: In America, Affluence Equals Influence, US News.com, April 22, 2014; Jeffrey Sachs, Scott Pruitt sums up America’s big challenge, CNN, April 10, 2018; Andrew Prokop, 40 charts that explain money in politics, Vox, July 30, 2014; Ciara Torres-Spelliscy, Dark Money as a Political Sovereignty Problem, King’s Law Journal, Vol. 28, No. 2, 2017; Alex Tausanovitch, NRA, Russia and Trump: How ‘dark money’ is poisoning American democracy, CNBC, February 15, 2018; Matt Kelly, It’s Harder to Pay Off Foreign Governments than the American One: Novartis would think twice before giving hundreds of thousands of dollars to Vladimir Putin’s lawyer. But in Washington, the rules are different, BuzzFeed News, May 9, 2018; Fredreka Schouten, Exclusive: Three-quarters of the secret money in recent elections came from 15 groups, USA Today, September 12, 2018; Michael Beckel, Dark Money Illuminated, Issue One (issueone.org), 2018.

UK: George Monbiot, How Corporate dark money is taking power on both sides of the Atlantic, The Guardian, February 2, 2017; Duncan Hames, British politics is in the pocket of big money. And the EU vote was no exception, The Guardian, October 7, 2016; Tamasin Cave and Andy Rowell, The truth about lobbying: 10 ways big business controls government, The Guardian, March 12, 2014; Carole Cadwalladr, ‘Dark money’ is threat to integrity of UK elections, say leading academics, The Guardian, April 1, 2017, Ciara Torres-Spelliscy, Dark Money as a Political Sovereignty Problem, King’s Law Journal, Vol. 28, No. 2, 2017.

Australia: Mike Steketee, Donations and democracy: how money is compromising our political system, ABC News (abc.net.au), July 2, 2015; Gareth Hutchens, Labor senator Sam Dastyari claims 10 companies have taken control of Australian politics, Sydney Morning Herald, February 5, 2016; Warwick Smith, Political donations corrupt democracy in ways you might not realise, The Guardian, September 11, 2014; Professor Iain McMenamin, No bribes please, we’re corrupt Australians, The Conversation, May 30, 2016.

EU: Ian Traynor, 30,000 lobbyists and counting: is Brussels under corporate sway?, The Guardian, May 8, 2014; Money, Politics, Power: Corruptions Risks in Europe, Transparency International (transparency.eu), 2012.

Canada: Nancy Macdonald, Welcome to British Columbia, where you ‘pay to play’, Maclean’s, February 11, 2017; Dan Levin, British Columbia: The ‘Wild West’ of Canadian Political Cash, New York Times, January 13, 2017; Ian Bailey, Donations taint B.C.’s approval of Trans Mountain pipeline expansion: advocacy group, Globe and Mail, January 31, 2017; Anver Emon, Foreign Dark Money Taints Canadian Parliamentary Proceeding, University of Toronto Faculty of Law (law.utoronto.ca), October 23, 2017; Linda McQuaig, Who owns Stephen Harper? Money in Politics. ‘Secret Donors’ Supported His Rise to Power, Global Research.ca, February 13, 2015 (and see, Now Toronto.com, February 4, 2015); Beth Hong, Charitiable Fraser Institute received $4.3 million in foreign funding since 2000, Vancouver Observer, August 30, 2012; Anne Kingston, How Canada’s growing anti-abortion movement plans to swing the next federal election, Macleans.ca, September 12, 2018; Daniel Tencer, Koch Brothers, Tea Party Billionaires, Donated To Right-Wing Fraser Institute, Reports Show, Huffington Post, April 26, 2012; Warren Bell, Canada’s Republican prime minister, National Observer, October 18, 2015; The Far Right Dark Money Network Behind Conservative Politics: The Justice Centre for Constitutional Freedoms, North 99.org, January 26, 2018; Olivia Ward, Billionaire Koch brothers are big oil players in Alberta, Toronto Star, July 6, 2014; Daphne Bramham, Lessons for Canada from how the Koch brothers hijacked democracy, Vancouver Sun, September 25, 2016; Mitchell Anderson, Canada’s Real Problem with Intrusive Foreign Interests, The Tyee, February 24, 2014; David Sassoon, Koch Brothers’ Activism Protects their 50 Years in Canadian Heavy Oils, Reuters, May 10, 2012; Ed Finn (editor), Canada After Harper: His ideology-fuelled attack on Canadian society and values, John Lorimer & Company, 2015; Tristin Hopper, Stephen Harper at Bohemian Grove? Hacked email says ex-leader visited shadowy GOP summer camp, National Post, September 16, 2016; Dermod Travis, B.C. Politics Has a ‘Dark Money’ Problem, Huffington Post, December 9, 2015; Graham Thomson, Lone Liberal MLA David Swann warns of ‘dark money’ dangers, Edmonton Journal, November 2, 2017; Chrystia Freeland, Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else, Penguin Press, 2012.

[87] Andrew Prokop, 40 charts that explain money in politics, Vox, July 30, 2014; Paul Blumenthal, Return on Lobbying Investment: 22,000%, Sunlight Foundation.com, April 9, 2009, Also see, Ian Traynor, 30,000 lobbyists and counting: is Brussels under corporate sway?, The Guardian, May 8, 2014; George Monbiot, How Corporate dark money is taking power on both sides of the Atlantic, The Guardian, February 2, 2017; James Hohmann, The Daily 202: Mick Mulvaney’s confession highlights the corrosive influence of money in politics, Washington Post, April 25, 2018; David Graham, Mick Mulvaney Says the Quiet Part Out Loud – head of the Consumer Finance Protection Bureau tells it like it is: if you want access to policymakers, it’s helpful to donate lots of money, The Atlantic, April 25, 2018; Renae Merle, Mulvaney discloses ‘hierarchy’ for meeting lobbyists, saying some would be seen only if they paid, Washington Post, April 25, 2018.

[88] Jeffrey Sachs, Scott Pruitt sums up America’s big challenge, CNN, April 10, 2018. Also see, George Tyler, Billionaire Democracy: The Hijacking of the American Political System, BenBella Books, 2018; Alexander Burns, Jasmine Lee, and Rachel Shorey, Billionaire vs. Billionaire: A Tug of War Between 2 Rogue Donors, New York Times, April 12, 2018. Also see, Jane Mayer, Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right, First Anchor Books Edition, 2016, 2017 (preface); Charles Kaiser, Dark Money review: Nazi oil, the Koch brothers and a rightwing revolution, The Guardian, January 17, 2016; Daniel Ben-Ami, Book Review: ‘Dark Money’, by Jane Mayer, Financial Times, March 11, 2016; Alan Ehrenhalt, ‘Dark Money’, by Jane Mayer, New York Times, January 19, 2016; Donald Gutstein, Harperism: How Stephen Harper and his think tank colleagues have transformed Canada, James Lorimer & Company Publishers, 2014; Bruce Livesey, How Canada made the Koch brothers rich, National Observer, May 5, 2015; Gerald Caplan, Harper is Right: Foreign radicals are after the oil sands, Globe and Mail, May 26, 2012; Daniel Tencer, Koch Brothers, Tea Party Billionaires, Donated To Right-Wing Fraser Institute, Reports Show, Huffington Post, April 26, 2012; Daphne Bramham, Lessons for Canada from how the Koch brothers hijacked democracy, Vancouver Sun, September 25, 2016; Elizabeth McSheffrey, Are the billionaire American Koch brothers playing climate politics in Alberta?, National Observer, January 13, 2017.

[89] Stephen Kobrin, Multinational Corporations, the Protest Movement and the Future of Global Governance, Chapter 9 in A. Chandler and B. Mazlish (editors), Leviathans: Multinational Corporations and the New Global History, Cambridge University Press, 2005.

[90] Martin Wolf, A Republican tax plan built for plutocrats, Financial Times, November 21, 2017; John Wasik, How the GOP Tax Plan Scrooges Middle Class, Retired and Poor, Forbes, November 29, 2017; Peter Goodman and Patricia Cohen, It Started as a Tax Cut. Now It Could Change American Life, New York Times, November 29, 2017; Josh Hoxie, Trump’s Tax Cuts Are the Biggest Wealth Grab in Modern History, Fortune, November 3, 2017; Stan Collender, Paul Ryan’s Most Lasting Legacy: Permanent Trillion-Dollar Deficits, Forbes, April 11, 2018; Mark Warner, Congress and the $1 trillion deficit: time to be straight with the American People, CNBC, April 10, 2018; Stephen Gandel, Trump tax cut is the gift that keeps on giving, BNN Bloomberg.ca, May 25, 2018; Dylan Scott, House Republican: my donors told me to pass the tax bill ‘or don’t ever call me again’, Vox, November 7, 2017; Emily Stewart, Citigroup CEO explains why tax cuts outweigh Trump tweets – and Citibank reported a 24 percent profit jump. Here’s how they’re related, Vox, April 14, 2018; Bob Ryan, Top Republican senator says voting for the GOP tax law could be ‘one of the worst votes I’ve made’, Business Insider UK, April 11, 2018 (“This Congress and this administration likely will go down as one of the most fiscally irresponsible administrations and Congresses that we’ve had”); Tom Dickinson, How the GOP Became the Party of the Rich – the inside story of how the Republicans abandoned the poor and middle class to pursue their relentless agenda of tax cuts for the wealthiest one percent, Rolling Stone, November 9, 2011:

“To truly understand the depth of the GOP’s entrenched opposition to Obamacare [healthcare], it’s crucial to understand how the reform is financed: The single largest source of funds comes from increasing Medicare taxes on the wealthy – including new taxes on investment income. According to the Tax Policy Center, Americans who make more than $1 million a year will pay an extra $37,381 in annual taxes under the plan. The top 400 taxpayers [billionaires] would contribute even more: an average of $11 million each. Rarely in American history has a tax so effectively targeted the top one percent.” 

[91] Bloomberg, Trump signs executive orders cracking down on federal unions representing about 2.1 million employees, Los Angeles Times, May 25, 2018; Robert Barnes, Supreme Court rules that companies can require workers to accept individual arbitration, Washington Post, May 21, 2018; Adam Liptak, Supreme Court Upholds Workplace Arbitration Contracts Barring Class Actions, New York Times, May 21, 2018.

[92] Hilary Matfess and Michael Miklaucic (editors), Beyond Convergence: World Without Order, Center for Complex Operations at National Defense University, 2016 – see, Chapter 2, Nils Gilman, The Twin Insurgencies: Plutocrats and Criminals Challenge the Westphalian State; Lars Osberg, The Age of Increasing Inequality: The Astonishing Rise of Canada’s 1%, James Lorimer & Company Publishers, 2018; Daniel Tencer, Relentlessly Rising Wealth Disparity Threatens To Destabilize Canada: Author, September 11, 2018. Also see, Peter Goodman, Britain’s Big Squeeze: In Britain, Austerity is Changing Everything, New York Times, May 28, 2018; Matthew Snow, Against Charity, Jacobinmag.com, August 25, 2015; Peter Singer, Famine, Affluence, and Morality, Philosophy and Public Affairs, Vol. 1, No. 1, Spring 1972; Peter Singer, The Life You can Save, Random House, 2009; Jacob Silverman, The Billionaire Philanthropist, LongReads.com, March 13, 2018; Anand Giridharadas, Winners Take All: The Elite Charade of Changing the World, Alfred A. Knopf publisher, 2018.

[93] Anand Giridharadas, Winners Take All: The Elite Charade of Changing the World, Alfred A. Knopf publisher, 2018.

[94] Roberta Lexier and Avi Lewis, Corporate welfare bums: It’s payback time, The Conversation, December 5, 2018; Roberta Lexier and Avi Lewis, It’s Time ‘Corporate welfare bums’ Paid Canadians Back, Huffington Post, December 11, 2018.

[95] Franklin D. Roosevelt, President of the United States (1933-1945), Message to Congress on Curbing Monopolies, April 29, 1938, The American Presidency Project (presidency.ucsb.edu). Also see, Felix Salmon, Why the world elite won’t lift a finger to stop Trump, Splinter News.com, December 16, 2016.

[96] Chrystia Freeland, Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else, Penguin Press, 2012; Don Pittis, Plutocrats with the crony capitalism are taking over again in the U.S., CBC.ca, February 20, 2017; Nick Hanauer, To My Fellow Plutocrats: You Can Cure Trumpism – pay your workers a decent wage, Politico.com, July 18, 2017.

[97] What’s Gone Wrong With Democracy, The Economist, March 1, 2014.

[98] See for example, Saskia Brechenmacher, Comparing Democratic Distress in the United States and Europe, Carnegie Endowment.org, June 21, 2018; E.J. Dionne Jr., Are Republicans abandoning democracy?, Washington Post, December 9, 2018; David Leonhardt, The Corporate Donors Behind a Republican Power Grab, New York Times, December 9, 2018.

[99] The Fourth Industrial Revolution, or 4IR, is the fourth major industrial era since the initial Industrial Revolution of the 18th century. The Fourth Industrial Revolution can be described as a range of new technologies that are fusing the physical, digital and biological worlds, and impacting all disciplines, economies and industries. At its core is the combination of big data, analytics and physical technology – providing increasingly enhanced, customized offerings to help meet the needs of organizations and individuals that can adapt and evolve to changing situations and requirements over time. Central to this revolution are emerging technology breakthroughs in fields such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3D printing and nanotechnology. Moreover, it is disrupting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance. Business leaders and senior executives and their trusted business and legal advisors need to understand their changing environment, challenge the assumptions of operating teams, and relentlessly innovate.  See, Klaus Schwab, The Fourth Industrial Revolution: what it means, how to respond, World Economic Forum, January 14, 2016; Irving Wladawsky-Berger, The Fourth Industrial Revolution: Risks and Benefits, Wall Street Journal, February 24, 2017; Ernst & Young, What is the Fourth Industrial Revolution? How will it affect business and society, EY (betterworkingworld.ey.com); Hugh Son, JP Morgan Software Does in Seconds What Took Lawyers360,000 Hours, Bloomberg, February 27, 2017; Alex Gray, The 10 skills you need to thrive in the Fourth Industrial Revolution, World Economic Forum, January 19, 2016; George Beaton, The 4th industrial revolution is happening now, LinkedIn, January 13, 2019.

[100] Torrey Taussig and Bruce Jones, Democracy in the new geopolitics, Brookings.edu, March 22, 2018.

[101] What is populism?, The Economist, December 19, 2016:

“Populists may be militarists, pacifists, admirers of Che Guevara or of Ayn Rand; they may be tree-hugging pipeline opponents or drill-baby-drill climate-change deniers. What makes them all “populists”, and does the word actually mean anything? …

 

As Benjamin Moffitt explains in his book “The Global Rise of Populism”, a conference at the London School of Economics in 1967 agreed that the term, while useful, was too mushy to be tied down to a single description. Some scholars linked it to frustration over declines in status or welfare, some to nationalist nostalgia. Others saw it as more of a political strategy in which a charismatic leader appeals to the masses while sweeping aside institutions (though not all populist movements have such a leader). Despite its fuzziness, the term’s use has grown.                                                       

In 2004 Cas Mudde, a political scientist at the University of Georgia, offered a definition that has become increasingly influential. In his view populism is a “thin ideology”, one that merely sets up a framework: that of a pure people versus a corrupt elite. (He contrasts it with pluralism, which accepts the legitimacy of many different groups.) This thin ideology can be attached to all sorts of “thick” ideologies with more moving parts, such as socialism, nationalism, anti-imperialism or racism, in order to explain the world and justify specific agendas. …                       

But other scholars feel that the thin-ideology definition fails to capture some dimensions. Jan-Werner Müller, a political scientist at Princeton University, thinks populists are defined by their claim that they alone represent the people, and that all others are illegitimate. And there are important distinctions within the category, such as that between inclusive and exclusive varieties. Exclusive populism focuses on shutting out stigmatised groups (refugees, Roma), and is more common in Europe. Inclusive populism demands that politics be opened up to stigmatised groups (the poor, minorities), and is more common in Latin America. Mr. Mudde argues that while most writers deplore populism, its upside lies in forcing elites to discuss issues they prefer to ignore. But populism’s belief that the people are always right is bad news for two elements of liberal democracy: the rights of minorities and the rule of law.”

[102] Editorial Board, Macron, at the Barricades, Warns of Rising Nationalism in Europe, New York Times, April 18, 2018; Editorial Board, Leaders worldwide are falling for a ‘deadly illusion’, Washington Post, April 18, 2018; Adam Fleming, France’s Macron urges EU to shun nationalism, BBC.com, April 17, 2018; Pablo Gorondi, Populist Prime Minister Viktor Orban Wins Third Consecutive Term in Hungary, Time, April 9, 2018; Neil Buckley and Andrew Byrne, The rise and rise of Viktor Orban – the man who has turned Hungary into a semi-authoritarian regime was once a democratic activist. What happened?, Financial Times, January 25, 2018; Eric Reguly, Analysts fear economic repercussions as Italy’s anti-establishment parties agree to form government, Globe and Mail, May 14, 2018; Lauren Said-Moorhouse, Hilary Clarke, and Euan McKirdy, Italy’s voters choose populists, deliver stinging rebuke to Europe, CNN, March 5, 2018; Stephanie Kirchgaessner, Italy’s voters ditch the centre and ride a populist wave, The Guardian, March 5, 2018; Ronald Inglehart and Pippa Norris, Trump, Brexit, and the Rise of Populism: Economic Have-Nots and Cultural Backlash, Harvard Kennedy School of Government, HKS Faculty Research Working Paper Series, August 2016; Hendrik Brakel, Oscar Williams-Grut, Brexit and Trump are just the start – populism will strike Europe next, Business Insider, November 10, 2016; Pippa Norris, Its not just Trump. Authoritarian populism is rising across the West. Here’s why, Washington Post, March 11, 2016; Andrew Cumbers, Economically marginalized voters played a critical role in Trump’s rise, Brexit, and a shift to the far right in Europe, Business Insider, January 13, 2017; Elaine Ganley, Marine Le Pen’s new, less racist, vision for France has her ahead in the polls: Le Pen sees ‘grand return’ of nationalism and a new France, Toronto Star, January 12, 2017; 5 Minutes for Business: Rise of the Trumps – Why Populism is all the Rage, Canadian Chamber of Commerce, Burnaby Board of Trade, February 9, 2016; Barclays: ‘Markets may have taken the wrong lessons from Donald Trump and Brexit’, Business Insider, January 13, 2017; Torrey Taussig and Bruce Jones, Democracy in the new geopolitics, Brookings.edu, March 22, 2018.

[103] Pippa Norris, Its not just Trump. Authoritarian populism is rising across the West. Here’s why, Washington Post, March 11, 2016. Also see, for example: Cas Muddle, The Trump phenomenon and the European populist radical right, Washington Post, August 26, 2015; Paul Krugman, Populism, Real and Phony, New York Times, December 23, 2016.

[104] Jonathan Tepper and Denise Hearn, Big companies are crushing their competition in the US, and it’s creating a dangerous ‘fake capitalism’ that hurts workers and consumers, Business Insider, January 15, 2019; Jonathan Tepper and Denise Hearn, The Myth of Capitalism: Monopolies and the Death of Competition, John Wiley & Sons, 2019.

[105] Ian Bremmer, A world in turmoil: What we must do to survive the coming political crisis, Globe and Mail, April 20, 2018. Also see, Jack Houston, Sara Silverstein and Lauren Shamo, The founder of the World Economic Forum shares what he sees as the biggest threat to the global economy, Business Insider, January 14, 2018; The rules-based system is in grave danger, The Economist, March 8, 2018; We need a new international order. Here’s why, World Economic Forum, June 21, 2018.

[106] Andrew Hill, Mehreen Khan, and Richard Waters, The global hunt to tax Big Tech, Financial Times, November 2, 2018.

[107] Andrew Hill, Mehreen Khan, and Richard Waters, The global hunt to tax Big Tech, Financial Times, November 2, 2018.

[108] World Economic Forum in Davos out to heal ‘a fractured world’, Deutsche Welle (DW.com), January 23, 2018:

The topic of this year’s World Economic Forum (WEF) meeting in Davos is “Creating a shared future in a fractured world.” The motto is in direct contrast to US President Donald Trump’s “America first” policy which also involves large-scale protectionism and isolationist security policies.

“There is today a real danger of a collapse of our global systems,” said WEF founder Klaus Schwab. “But change is not just happening — it’s in our hands to improve the state of the world and that is what the World Economic Forum stands for.”

Susan Glasser, How Trump Made War on Angela Merkel and Europe, New Yorker, December 17, 2018 (“Trump has begun publicly calling the E.U. a “foe,” and promoting the resurgence of nationalism … . Trump’s Secretary of State, Mike Pompeo, in a recent speech at the German Marshall Fund in Brussels, attacked the United Nations, the E.U., the World Bank, and the International Monetary Fund, and derided what he called Europe’s flawed vision of multilateralism as “an end to itself.”); Salman Ahmed and Alexander Bick, Trump’s National Security Strategy: A New Brand of Mercantilism?, Carnegie Endowment for International Peace, August 17, 2017.

[109] Valerie Keller, Healing a fractured world by changing the rules of the game, LinkedIn, January 24, 2018.

[110] George Monbiot, How Corporate dark money is taking power on both sides of the Atlantic, The Guardian, February 2, 2017. Also see, Jane Mayer, Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right, First Anchor Books Edition, 2016, 2017 (preface). Also see, for example: Charles Kaiser, Dark Money review: Nazi oil, the Koch brothers and a rightwing revolution, The Guardian, January 17, 2016; Daniel Ben-Ami, Book Review: ‘Dark Money’, by Jane Mayer, Financial Times, March 11, 2016; Alan Ehrenhalt, ‘Dark Money’, by Jane Mayer, New York Times, January 19, 2016.

[111] Bart Meijer, Google shifted $23 billion to tax haven Bermuda in 2017: filing, Reuters.com, January 3, 2019.

[112] Nicholas Bray, How Should Multinationals Be taxed?, Forbes, August 21, 2013; Fair Taxation of the Digital Economy, ec.europa.eu, March 21, 2018.

[113] Business Among Friends: Why corporate tax dodgers are not yet losing sleep over global tax reform, Oxfam.org, May 2014. Also see, Jane Gravelle, Tax Havens: International Tax Avoidance and Evasion, Washington, DC: Congressional Research Service, 2015.

[114] Nicholas Lord, Tax avoidance might be legal but it’s time we seriously questioned its ethics, The Conversation, November 8, 2-17.

[115] Luke Harding, Reporting on Trump and Putin amid the war on truth, The Guardian, October 13, 2018.

[116] Business Among Friends: Why corporate tax dodgers are not yet losing sleep over global tax reform, Oxfam.org, May 2014. Also see, Eric Sigurdson, Corporate Strategy and Geopolitical Risk in a G-Zero World: Inequality, Polarized Democracies, and the shifting economic and political landscape, Sigurdson Post, May 31, 2018; Ivana Kottasova, Big Tech’s next European nightmare: A tax on revenues, CNN, October 31, 2018.

[117] Luke Harding, Reporting on Trump and Putin amid the war on truth, The Guardian, October 13, 2018.

[118] For example see, Heiner Schmittdiel, Are CEOs Incentivized to Avoid Corporate Taxes? – empirical evidence on managerial bonus contracts, Tinbergen Institute Discussion Paper 14-048/VII, March 25, 2014; Fabio Gaertner, After-Tax Compensation of CEOs Encourages Tax Avoidance, Wisconsin School of Business (bus.wisc.edu), February 19, 2014; Christopher Armstrong, Jennifer Blouin, Alan Jagolinzer, and David Larcker, Corporate Governance, Incentives, and Tax Avoidance, Graduate School of Stanford Business (gsb.stanford.edu), Working Paper No. 2134, February 25, 2015; Hiroshi Ohnuma, Does Executive Compensation Reflect Equity Risk Incentives and Corporate Tax Avoidance? A Japanese Perspective, Corporate Ownership & Control, Vol. 11, Issue 2, 2014; Milda Tylaite, Essays on the Non-Financial Determinants of Corporate Tax Planning Outcomes, Stockholm School of Economics, Dissertation for the Degree of Doctor of Philosophy, Ph.D., 2018 (“… tax avoidance … I find some evidence that executives are rewarded, either via promotions or compensation”); Governance Issues: Why and How to Engage on Corporate Tax Responsibility – The business case for responsible investors to explore the long-term implications of tax-related risks is multifaceted, Principles of Responsible Investment (unpri.org), March 30, 2016. Also see, David Pring-Mill, Are Tech Companies Avoiding Taxes?, National Interest.org, February 8, 2018 (“The profit motive incentivizes this tax avoidance …”).

[119] Simon Bowers, US tech giants launch fierce fightback against global tax avoidance crackdown – lobbyists representing firms including Google, Amazon and Apple claim ‘fundamental flaws’ in G20-led reforms, Guardian, January 21, 2015.

[120] Nicholas Bray, How Should Multinationals Be taxed?, Forbes, August 21, 2013.

[121] Sasja Beslik, Companies should be forced to say how much tax they pay and where, Guardian, November 11, 2016.

[122] Annie Lowrey, Jeff Bezos’s $150 Billion Fortune Is a Policy Failure: growing inequality in the United States shows that the game is rigged, The Atlantic, August 1, 2018.

[123] OECD Work on Taxation: 2018-2019, The Organisation for Economic Co-operation and Development (oecd.org), 2018; Tax Challenges Arising from Digitalisation – Interim Report 2018: Inclusive Framework on BEPS, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, 2018; Addressing the Tax Challenges of the Digital Economy, Action 1 – 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, 2015; Tax Challenges of Digitalisation, Comments Received on the Request for Input – Part II, OECD.org, October 25, 2017.

[124] Base erosion and profit shifting, OECD.org; Tax Challenges Arising from Digitalisation – Interim Report 2018: Inclusive Framework on BEPS, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, 2018. Also see, What is BEPS, Transfer Pricing Asia.com, January 29, 2017:

“BEPS is an abbreviation of four words. BEPS stands for: Base Erosion and Profit Shifting. This in turn refers to two common practices for multinationals to lower the taxes that they pay (notably: corporate taxes).

  • “Base erosion” refers to the practice of reducing the taxable base. An example is deducting large interest payments in order to lower the taxable profits.
  • “Profit shifting” refers to the practice of shifting taxable profits from high-tax countries to low-tax countries. An example is the transfer of ownership of intellectual property and its income from the US (high-tax) to Bermuda (low-tax).

International organizations like the OECD have labeled Base Erosion and Profit Shifting as a major issue. This leads us to the other way in which the word “BEPS” is often used. …

To refer to the set of rules being implemented worldwide to combat the practice of base erosion and profit shifting, which is considered harmful.”

[125] Digital Taxation Opens the Pandora Box: The OECD Interim Report and the European Commission Proposals, Croner-i.co.uk, Volume 46, Issue 6/7, 2019:

There are at least five scenarios under consideration:

  1. to adopt a specific tax for the digital sector, announced as a short-term and interim measure, to be applicable in the jurisdiction of the beneficiary of the services or goods (either in business-to-business situations (B2B) or in business-to-consumer situations (B2C)), and to be combined with a general corporate income tax based on transfer pricing rules and value creation;
  2. to work within the logic and methodology of the BEPS project (transfer pricing and value creation), (1) amending or improving the concept of permanent establishment, where there is a minimum number of active users or online contracts, in order to capture digital transactions, and (2) including anti-fragmentation rules;
  3. to move away from the dominant (i.e. OECD) international tax system, granting more power to source countries, either via gross withholding taxes (as the new provision in the 2017 UN Model Tax Convention attributing taxing rights to the source state in relation to fees for technical services), or via net taxation, and excluding a ring-fence solution for the digital sector;
  4. to adopt a destination-based tax, excluding a ring-fence solution for the digital sector; and
  5. to integrate the digital sector in a formula-based transfer pricing regime, or a profit-splitting method, and excluding a ring-fence solution for the digital sector; or some other type of formulary apportionment regime, replacing the current source-based international tax regime.

[126] David Pring-Mill, Are Tech Companies Avoiding Taxes?, National Interest, February 8, 2018. Also see, Max Cherney, Protestors Tried to Get Apple to Sign a $5 Billion Check for Dodged Taxes, MotherBoard, June 3, 2014 (“Apple has … also proven to be quite innovative when it comes to dodging Uncle Sam”); Greg Ip, Apple’s Tax Avoidance Illustrates Gap Between Law and Economics: Europe case shows how companies’ legal setups defy economic logic, Wall Street Journal, September 7, 2016:

“American companies like Apple Inc. aren’t just world-class innovators in personal technology and marketing. They are also, it turns out, world-class innovators in tax avoidance.”

[127] Alex Hern, ‘Tech tax’ necessary to avoid dystopia, says leading economist, The Guardian, October 23, 2018.

[128] John Harris, Without a fair tax on tech, it could be the end of the state as we know it, The Guardian, November 11, 2018.

[129] Karlin Lillington, Sneaky tax avoidance by super-wealthy elite is not victimless, Irish Times, November 9, 2017.

[130] Pat Leahy, Society relies on a social compact. Time for tax-avoiding multinationals to sign up, Irish Times, November 11, 2017.

[131] Pat Leahy, Society relies on a social compact. Time for tax-avoiding multinationals to sign up, Irish Times, November 11, 2017.

[132] Pat Leahy, Society relies on a social compact. Time for tax-avoiding multinationals to sign up, Irish Times, November 11, 2017.

[133] Owen Jones, Apple must now pay its taxes. This is a vindication of protest, Guardian, August 30, 2016 (“Companies that depend on state largesse – from infrastructure to an education system that trains their employees, to in-work benefits – refuse to contribute in return”); Joseph Stiglitz, Globalisation isn’t just about profits. It’s about taxes too, Guardian, May 27, 2013; Farhad Manjoo, Obama Was Right: The Government Invented the Internet, Slate, July 24, 2012 (“The Internet didn’t get invented on its own,” Obama said. “Government research created the Internet so that all the companies could make money off the Internet.”); David Pring-Mill, Are Tech Companies Avoiding Taxes?, National Interest.org, February 8, 2018 (“The fact that much of the underlying technological innovation that enables the digital economy originates from massive state-led investment going back to the 1970s and beyond, not least the world wide web itself, seems to be immaterial to these free-riding company executives.”); Ben Tarnoff, How the internet was invented, Guardian, July 15, 2016 (“The people who invented the internet came from all over the world. They worked at places as varied as the French government-sponsored computer network Cyclades, England’s National Physical Laboratory, the University of Hawaii and Xerox. But the mothership was the US defense department’s lavishly funded research arm, the Advanced Research Projects Agency (Arpa) – which later changed its name to the Defense Advanced Research Projects Agency (Darpa) –and its many contractors. Without Arpa, the internet wouldn’t exist.”); Michael Moyer, Yes, Government Researchers Really Did Invent the Internet, Scientific American.com, July 23, 2012; Katie Haner and Matthew Lyon, Where Wizards Stay Up Late: The Origins of the Internet, Simon & Schuster, 1996; Barry M. Leiner, Vinton G. Cerf, David D. Clark, Robert E. Kahn, Leonard Kleinrock, Daniel C. Lynch, Jon Postel, Larry G. Roberts, Stephen Wolff, Brief History of the Internet, Internet Society.org, 1997.

[134] Thomas Walkom, Why, after years of ignoring tax havens, are governments paying attention?, Toronto Star, November 8, 2017.

[135] Owen Jones, Apple must now pay its taxes. This is a vindication of protest, Guardian, August 30, 2016; Jia Lynn Yang, The British want to stop Starbucks from dodging taxes. It won’t work, Washington Post, April 18, 2014; Roberta Lexier and Avi Lewis, Corporate welfare bums: It’s payback time, The Conversation, December 5, 2018; Roberta Lexier and Avi Lewis, It’s Time ‘Corporate welfare bums’ Paid Canadians Back, Huffington Post, December 11, 2018.

[136] Anup Shah, Tax Avoidance and Tax Havens; Undermining Democracy, Global Issues.org, January 7, 2013; Prem Sikka, Accountants: a threat to democracy, Guardian, September 5, 2005.

[137] Owen Jones, Apple must now pay its taxes. This is a vindication of protest, Guardian, August 30, 2016; Chris Nicholas, Twelve steps to stop tax avoidance, New Statesman, September 3, 2013; Bob Cox, What Facebook and Google don’t get about Canada’s digital tax proposal, Globe and Mail, February 28, 2017.

[138] Owen Jones, Apple must now pay its taxes. This is a vindication of protest, Guardian, August 30, 2016; Jia Lynn Yang, The British want to stop Starbucks from dodging taxes. It won’t work, Washington Post, April 18, 2014; Chris Blackhurst, Panamanian leaks have revealed some of the tricks the super-rick use to cut their tax bills. But what can we do about it?, Management Today.co.uk, April 4, 2016 (updated April 21, 2016); Roberta Lexier and Avi Lewis, Corporate welfare bums: It’s payback time, The Conversation, December 5, 2018; Roberta Lexier and Avi Lewis, It’s Time ‘Corporate welfare bums’ Paid Canadians Back, Huffington Post, December 11, 2018.

[139] Shaun Nichols, Apple Store besieged by protestors in Paris ‘die-in’ over tax avoidance, The Register, April 10, 2018. Also see, Max Cherney, Protestors Tried to Get Apple to Sign a $5 Billion Check for Dodged Taxes, MotherBoard, June 3, 2014.

[140] Hallie Detrick, Welcome to Paris! Tax Protest Blights Opening of Apple’s New Champs-Elysees Store, Fortune, November 19, 2018; Aaron Pressman, How Apple Uses the Channel Island of Jersey In Tax Strategy, Fortune, November 6, 2017; Greg Ip, Apple’s Tax Avoidance Illustrates Gap Between Law and Economics: Europe case shows how companies’ legal setups defy economic logic, Wall Street Journal, September 7, 2016.

[141] Chris Johnston, Apple is first public company worth $1 trillion, BBC.com, August 2, 2018; Sara Salinas, Apple hangs onto its historic $1 trillion market cap, CNBC.com, August 2, 2018.

[142] Apple sues French tax activists who occupied Paris store, The Local, January 4, 2018; Apple loses bid to ban protests by French tax campaign group at its stores, RT.com, February 24, 2018; Ramin Mazaheri, Apples sues French NGO to stop tax evasion protests, PressTV.com, February 13, 2018.

[143] Paul Gillespie, Tax avoidance by multinationals contributes to inequality and is in political firing line, Irish Times, September 3, 2016; Roberta Lexier and Avi Lewis, Corporate welfare bums: It’s payback time, The Conversation, December 5, 2018; Roberta Lexier and Avi Lewis, It’s Time ‘Corporate welfare bums’ Paid Canadians Back, Huffington Post, December 11, 2018.

[144] Anup Shah, Tax Avoidance and Tax Havens; Undermining Democracy, Global Issues.org, January 7, 2013; Prem Sikka, Accountants: a threat to democracy, Guardian, September 5, 2005; Joseph Stiglitz, Globalisation isn’t just about profits. It’s about taxes too, Guardian, May 27, 2013; Wayne Swan, Tax avoidance impoverishes us all. Fighting it requires challenging the powerful, Guardian, January 11, 2016.

[145] Stian Reimers, When it comes to tax, how do we decide what’s fair, The Conversation, April 8, 2016; Rupert Neate and David Smith, Obama calls for international tax reform amid Panama Papers revelations, The Guardian, April 5, 2016.

[146] Viola Tanto, The International Company and Tax Avoidance, European Journal of Multidisciplinary Studies, Vol. 1, No. 6, Sep-Dec 2016 (PHD Candidate in Tax Law, Business and Private Law Department, European University of Tirana). Also see, Marco Chown Oved, Toby Heaps, and Michael Yow, The High Cost of Low Corporate Taxes, December 14, 2017;

[147] Nicholas Bray, How Should Multinationals Be taxed?, Forbes, August 21, 2013.

[148] Democracy continues its disturbing retreat, The Economist, January 31, 2018; Eric Sigurdson, Corporate Strategy and Geopolitical Risk in a G-Zero World: Inequality, Polarized Democracies, and the shifting economic and political landscape, Sigurdson Post, May 31, 2018; Richard Wike, Katie Simmons, Bruce Stokes, and Janell Fetterolf, Globally, Broad Support for Representative and Direct Democracy: 1. Many unhappy with current political system, Pew Research Center (Pew Global.org), October 16, 2017; John Cassidy, Is America an Oligarchy? New Yorker, April 18, 2014; Martin Gilens and Benjamin Page, Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens, Perspectives on Politics, Volume 12, No. 3, September 2014; Martin Gilens, Affluence and Influence: Economic Inequality and Political Power in America, Princeton University Press, 2014. Also see, Jack Houston, Sara Silverstein and Lauren Shamo, The founder of the World Economic Forum shares what he sees as the biggest threat to the global economy, Business Insider, January 14, 2018 (“… we also have to make sure that we not destroy national social coherence because national social coherence is the prerequisite for democracies”); Dr. Roberto Cuellar, Social Cohesion and Democracy, International Institute for Democracy and Electoral Assistance, 2009; Michael Valpy, The fraying of Canada’s social fabric, Toronto Star, September 22, 2015.

[149] Overhaul tax for the 21st century, The Economist, August 9, 2018.

[150] Marco Chown Oved, Toby Heaps, and Michael Yow, The High Cost of Low Corporate Taxes, December 14, 2017.

[151] OECD Work on Taxation: 2018-2019, The Organisation for Economic Co-operation and Development (oecd.org), 2018. Also see, Viola Tanto, The International Company and Tax Avoidance, European Journal of Multidisciplinary Studies, Vol. 1, No. 6, Sep-Dec 2016 (PHD Candidate in Tax Law, Business and Private Law Department, European University of Tirana). Also see, Peter Coy, Can we tame Google, Facebook, Amazon and Apple?, Sydney Morning Herald, December 2, 2017; Competition in the digital age: How to tame the tech titans, The Economist, January 18, 2018; David Dayen, Big Tech: The New Predatory Capitalism – the tech giants are menacing democracy, privacy and competition, American Prospect, December 26, 2017.

[152] David Pegg, The tech giants will never pay their fair share of taxes – unless we make them, The Guardian, December 11, 2017. Also see, Peter Coy, Can we tame Google, Facebook, Amazon and Apple?, Sydney Morning Herald, December 2, 2017; Competition in the digital age: How to tame the tech titans, The Economist, January 18, 2018; David Dayen, Big Tech: The New Predatory Capitalism – the tech giants are menacing democracy, privacy and competition, American Prospect, December 26, 2017.

[153] Eric Sigurdson, Corporate Strategy and Geopolitical Risk in a G-Zero World: Inequality, Polarized Democracies, and the shifting economic and political landscape, Sigurdson Post, May 31, 2018.

[154] Viola Tanto, The International Company and Tax Avoidance, European Journal of Multidisciplinary Studies, Vol. 1, No. 6, Sep-Dec 2016 (PHD Candidate in Tax Law, Business and Private Law Department, European University of Tirana).

[155] Patrick Wintour and Simon Bowers, G20 report warns of global tax chaos: international tax system cannot deal with mobile multinational firms that shift profits to low-tax countries, says OECD thinktank, The Guardian, July 19, 2015. For a different perspective on ‘global tax chaos’, see: Russell Guthrie, Avoiding “Tax Chaos” in the Globalized, Digital 21st Century, International Federation of Accountants (ifac.org), September 22, 2015; Robert Kovacev, Age of international tax cooperation or global tax chaos? Views from the Pacific Rim Tax Conference, Multinational Tax & Transfer Pricing News (mnetax.com), March 12, 2018; George Turner, Protesting PwC: Professionals Without Conscience, Tax Justice Network, taxjustice.net, April 6, 2017; Francine McKenna, Amazon Minimizes Profits Because CEO Jeff Bezos Hates Paying Taxes, Medium.com, September 29, 2014.

[156] David Meyer, The Battle Over Big Tech’s Regulation is being Sucked into Trump’s Trade War, and that’s Dangerous, Fortune, July 23, 2018.

[157] Nancy Manzano, Bernadette Pinamont, and George Salis, Making the case for a global tax transformation, World Finance.com, January 23, 2018.

[158] Alex Webb, U.K. Tech Tax Would Be Both Pointless and Essential, Bloomberg, October 29, 2018.

[159] Gregory Pun, Base Erosion and Profit Shifting: How Corporations Use Transfer Pricing to Avoid Taxation, 40 Boston College International and Comparative Law Review 287, 2017. Also see, Brian Arnold and James Wilson, Aggressive International Tax Planning by Multinational Corporations: The Canadian Context and Possible Responses, The School of Public Policy (University of Calgary), Vol. 7, Issue 29, September 2014; Asset Protection Strategy: Double Irish Dutch Sandwich, Medium.com (ICO Services), July 3, 2018.

[160] Patrick Wintour and Simon Bowers, G20 report warns of global tax chaos: international tax system cannot deal with mobile multinational firms that shift profits to low-tax countries, says OECD thinktank, The Guardian, July 19, 2015.

[161] Gregory Pun, Base Erosion and Profit Shifting: How Corporations Use Transfer Pricing to Avoid Taxation, 40 Boston College International and Comparative Law Review 287, 2017.

[162] Nicholas Bray, How Should Multinationals Be taxed?, Forbes, August 21, 2013.

[163] Fair Taxation of the Digital Economy, ec.europa.eu, March 21, 2018. Also see, David Meyer, The Battle Over Big Tech’s Regulation is being Sucked into Trump’s Trade War, and that’s Dangerous, Fortune, July 23, 2018; Kamal Ahmed, EU pushes for new tax on tech giants ‘by Christmas’, BBC.com, October 10, 2018; Nancy Manzano, Bernadette Pinamont, and George Salis, Making the case for a global tax transformation, World Finance.com, January 23, 2018.

[164] Note: Most countries allocate the source of income to the place of residence of the payer.  Joseph Isenbergh, International Taxation (3rd ed.), page 31. Also see: Klaus Vogel, Worldwide vs. Source Taxation of Income, A Review and Re-Evaluation of Arguments, Part I, 8/9 Intertax 216, 223 (1998/89) (observing that most authors take the source of income for granted).

[165] Clifton Clarke and Hershey Friedman, Maximizing Shareholder Value: A Theory Run Amok, i-manager’s Journal on Management, Vol. 10, Issue 4, 2016; Joseph L. Bower and Lynn S. Paine, The Error at the Heart of Corporate Leadership: most CEOs and Boards believe their main duty is to maximize shareholder value. It’s not, Harvard Business Review, May-June 2017.

[166] Simon Brew, Tech companies, tax and the Paradise Papers, IT Pro.co.uk, November 10, 2017. Also see, Fergus Shiel, Turkish journalist sentenced to prison over her reporting on the Paradise Papers investigation, Toronto Star, January 9, 2019.

[167] Company stakeholders: A stakeholder is a party that has an interest in a company, and can either affect or be affected by the business. The primary stakeholders in a typical corporation are its investors, employees and customers. However, the modern theory of the idea goes beyond this original notion to include additional stakeholders such as a community, government or trade association. [Investopedia.com and Wikipedia]

Primary Stakeholders – usually internal stakeholders, are those that engage in economic transactions with the business. (For example stockholders, customers, suppliers, creditors, and employees).

Secondary Stakeholders – usually external stakeholders, are those who – although they do not engage in direct economic exchange with the business – are affected by or can affect its actions (for example the general public, government, communities, activist groups, business support groups, and the media).

[168] See, Eric Sigurdson, Overcoming the Forces of ‘Short-termism’ – corporate governance, principled leadership, and long-term sustainable value creation, Sigurdson Post, February 19, 2018.

[169] Brad Nikolic, No Moral Compass, No Leadership Compass at all, LinkedIn, March 27, 2018:

“If businesses are unashamedly about maximising profits and being as successful as possible, then this desire can easily generate the ‘achievement-at-all-cost’ and ‘take every shortcut’ mentality. …

It is this mentality, when combined with highly incentivised remuneration, easily gives rise to walking the ‘ethical fine-line’. This in turn, potentially leads to a culture of greed, which places individuals into the zone of unethical territory. Put simply, if this mentality is combined with an amoral mindset then unacceptable leadership is almost guaranteed.”

[170] See generally, See, Eric Sigurdson, Overcoming the Forces of ‘Short-termism’ – corporate governance, principled leadership, and long-term sustainable value creation, Sigurdson Post, February 19, 2018.

[171] Andrew Ross Sorkin, BlackRock’s Message: Contribute to Society, or Risk Losing our Support, New York Times, January 15, 2018; Laurence Fink (Chairman and CEO, BlackRock), Larry Fink’s Annual Letter to CEOS: A Sense of Purpose, BlackRock.com, January 2018; Ben Marlow and Tim Wallace, ‘Larry’s Letter’ drives charge for reimagining of global capitalism, The Telegraph.co.uk, January 28, 2018; Andrew Ross Sorkin, Larry Fink Calls on Businesses to Lead, Not Just Live, With Purpose, New York Times, January 17, 2019.

[172] Joseph L. Bower and Lynn S. Paine, The Error at the Heart of Corporate Leadership: most CEOs and Boards believe their main duty is to maximize shareholder value. It’s not, Harvard Business Review, May-June 2017.

[173] Budget 2018: Tech giants face digital services tax, BBC.co.uk, October 29, 2018.

[174] See, for example, Sam Jones, Tax dodging by big firms ‘robs poor countries of billions of dollars a year’, Guardian, June 2, 2015; Sasja Beslik, Companies should be forced to say how much tax they pay and where, Guardian, November 11, 2016. Also see, Viola Tanto, The International Company and Tax Avoidance, European Journal of Multidisciplinary Studies, Vol. 1, No. 6, Sep-Dec 2016 (PHD Candidate in Tax Law, Business and Private Law Department, European University of Tirana).

[175] David Pegg, The tech giants will never pay their fair share of taxes – unless we make them, The Guardian, December 11, 2017.

[176] John Harris, Without a fair tax on tech, it could be the end of the state as we know it, The Guardian, November 11, 2018.

[177] See, Press Release: New Taxwatch report estimates UK is losing £1bn a year in taxes to profit shifting by just 5 companies, Tax Watch (taxwatchuk.org), October 28, 2018.

[178] OECD Work on Taxation: 2018-2019, The Organisation for Economic Co-operation and Development (oecd.org), 2018.

[179] Greg Ip, Apple’s Tax Avoidance Illustrates Gap Between Law and Economics: Europe case shows how companies’ legal setups defy economic logic, Wall Street Journal, September 7, 2016.

[180] Francine McKenna, Amazon Minimizes Profits Because CEO Jeff Bezos Hates Paying Taxes, Medium.com, September 29, 2014.

[181] Francine McKenna, Amazon Minimizes Profits Because CEO Jeff Bezos Hates Paying Taxes, Medium.com, September 29, 2014; Francine McKenna, How Zynga, Facebook, and Groupon’s Go-To Auditor Rewrites Accounting Rules, Forbes, April 23, 2012.

[182] Marco Chown Oved, Toby Heaps, and Michael Yow, The High Cost of Low Corporate Taxes, December 14, 2017.

[183] Nancy Manzano, Bernadette Pinamont, and George Salis, Making the case for a global tax transformation, World Finance.com, January 23, 2018.

[184] Eric Sigurdson, Corporate Strategy and Geopolitical Risk in a G-Zero World: Inequality, Polarized Democracies, and the shifting economic and political landscape, Sigurdson Post, May 31, 2018; Business Among Friends: Why corporate tax dodgers are not yet losing sleep over global tax reform, Oxfam.org, May 2014; Ivana Kottasova, Big Tech’s next European nightmare: A tax on revenues, CNN, October 31, 2018; Alex Webb, U.K. Tech Tax Would Be Both Pointless and Essential, Bloomberg, October 29, 2018 (“It goes without saying that there’s staunch opposition from the U.S.”); Jennifer Rankin, Facebook, Google and Amazon could pay ‘fair’ tax under EU plans: tech firms would pay wherever they have digital presence, regardless of staff location, The Guardian, March 21, 2018; Alan Rappeport, Milan Schreuer, Jim Tankersley, and Natasha Singer, Europe’s Planned Digital Tax Heightens Tensions with U.S., New York Times, March 19, 2018; Jim Waterson and Alex Hern, Hammond’s digital tax faces opposition from big tech firms, Guardian, October 30, 2018; Jonathan O’Connell and David Fahrenthold, T-Mobile announced a merger needing Trump administration approval. The next day, 9 executives had reservations at Trump’s hotel, Washington Post, January 16, 2019; Steve Benen, Needing Trump’s backing, telecom giant books rooms at his hotel, MSNBC, January 16, 2019. Also see corporate industry representation by TaxFoundation.org – Daniel Bunn, A Wave of Digital Taxation, taxfoundation.org, November 7, 2018; Daniel Bunn, A Summary of Criticisms of the EU Digital Tax, October 22, 2018.

[185] Viktoria Dendrinou, American Tech Giants Face New Tax Grab in Europe, Bloomberg, March 20, 2018. Also see, Business Among Friends: Why corporate tax dodgers are not yet losing sleep over global tax reform, Oxfam.org, May 2014; Ivana Kottasova, Big Tech’s next European nightmare: A tax on revenues, CNN, October 31, 2018; Alex Webb, U.K. Tech Tax Would Be Both Pointless and Essential, Bloomberg, October 29, 2018 (“It goes without saying that there’s staunch opposition from the U.S.”).

[186] Chris Denning, UK leads the way with a new digital services tax, MacintyreHudson.co.uk, October 30, 2018.

[187] Nancy Manzano, Bernadette Pinamont, and George Salis, Making the case for a global tax transformation, World Finance.com, January 23, 2018; Kamal Ahmed, EU pushes for new tax on tech giants ‘by Christmas’, BBC.com, October 10, 2018. Also see, Fair Taxation of the Digital Economy, ec.europa.eu, March 21, 2018.

[188] Sean O’Reilly and Neil Nolan, The EU Commission urges digital taxation reform, Ronan Daly Jermyn (rdj.ie), November 20, 2011; Discussion on Corporate Taxation Challenges of the Digital Economy, Presidency Issues Note for the Informal ECOFIN Tallinn, September 16, 2017.

[189] Tax challenges arising from digitalisation – Interim Report 2018, Eurofound.europa.eu, September 5, 2018; Tax Challenges Arising from Digitalisation – Interim Report 2018: Inclusive Framework on BEPS, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, 2018; Brief on the Tax Challenges Arising from Digitalisation: Interim Report 2018, oecd.org; 3 ways digitalisation is shaping the future of taxation, International Chamber of Commerce (iccwbo.org), March 7, 2018; Ashley Greenback and Riannon Kinghall Were, Taxing clicks: the European Commission’s new digital tax, Practical Law (uk.practicallaw.thomsonreuters.com), May 3, 2018.

[190] Alex Shephard, Is Amazon Too Big to Tax?, The New Republic, March 1, 2018.

[191] John Harris, Without a fair tax on tech, it could be the end of the state as we know it, The Guardian, November 11, 2018. Also see, James Titcomb, US cities offered billions in tax cuts to lure Amazon, The Telegraph, November 13, 2018; J. David Goodman, Amazon is Getting $1.5 Billion to Come to Queens. Now Begins the Fight Over if It’s Worth It., New York Times, November 13, 2018; Ben Casselman, A $2 Billion Question: Did New York and Virgina Overpay for Amazon?, New York Times, November 13, 2018; Karen Weise and J. David Goodman, Before a Deal, Amazon Had to Know: Could Cuomo and De Blasio Get Along?, New York Times, November 13, 2018; Jacqueline Hansen, Why Toronto won by losing its bid for Amazon’s new headquarters, CBC.ca, November 13, 2018. In addition see, Sheera Frenkel, Nicholas Confessore, Ceceila Kang, Matthew Rosenberg, and Jack Nicas, Delay, Deny and Deflect: How Facebook’s Leaders Fought Through Crisis, New York Times, November 14, 2018.

[192] Sol Picciotto (editor), Taxing Multinational Enterprises as Unitary Firms, Institute of Development Studies, 2017 (chapter 3, A Practical Approach to a Transition to Formulary Apportionment, Michael C. Durst). Also see, Michael C. Durst, The Tax Policy Outlook for Developing Countries: Reflections on International Formulary Apportionment, ICTD Working Paper 32, The International Centre for Tax and Development, 2015.

[193] See, Daniel Bernhard, Canada must regulate and tax U.S. social media and tech giants, Toronto Star, September 7, 2018.

[194] See generally, Mark Sweney, Amazon paid just £15m in tax on European revenues of £19.5bn, Guardian, August 10, 2017; Michael Rapoport, What Amazon Isn’t Telling Investors About Its Revenue, Wall Street Journal, December 22, 2018; Sol Picciotto (editor), Taxing Multinational Enterprises as Unitary Firms, Institute of Development Studies, 2017 (chapter 2, Unitary Alternatives and Formulary Appointment, Sol Picciotto).

[195] Sol Picciotto and Nicholas Shaxson, Make Corporate tax rules fair for all, Financial Times, November 19, 2012. Also see, Sol Picciotto, Taxing Multinational Enterprises as Unitary Firms, International Centre for Tax and Development, June 2016; Sol Picciotto (editor), Taxing Multinational Enterprises as Unitary Firms, Institute of Development Studies, 2017; Rosanne Altshuler and Harry Grubert, Formula Apportionment: Is It Better Than the Current System and Are There Better Alternatives?, National Tax Journal, Volume 63, Issue 4, 2010; Reuven S. Avi-Yonah and Kimberly A. Clausing, Reforming Corporate Taxation in a Global Economy: A Proposal to Adopt Formulary Apportionment, Discussion paper, Washington, DC: The Hamilton Project, 2007; Digital Taxation Opens the Pandora Box: The OECD Interim Report and the European Commission Proposals, Croner-i.co.uk, Volume 46, Issue 6/7, 2019; Tas Bindi, EU launches public consultation on tax regime for tech companies: The European Commission is looking to implement a fairer, more effective, and unified tax regime next year that makes sense in the digital age, ZDnet.com, October 27, 2017; Corinne Reichert, Germany wants to halt US tech giant tax evasion: Report, ZDnet.com, October 22, 2018.

[196] For example, see: Sean O’Reilly and Neil Nolan, The EU Commission urges digital taxation reform, Ronan Daly Jermyn (rdj.ie), November 20, 2011; Discussion on Corporate Taxation Challenges of the Digital Economy, Presidency Issues Note for the Informal ECOFIN Tallinn, September 16, 2017.

[197] Georg Kofler, Gunter Mayr, and Christoph Schlager, Taxation of the Digital Economy: ‘Quick Fixes’ or Long-Term Solution?, European Taxation (ibfd.org), December 2017; Peter Hongler and Pasquale Pistone, Blueprints for a New PE Nexus to Tax Business Income in the Era of the Digital Economy, IBFD White Paper (ibfd.org), January 20, 2015. See generally, Eli Hadzhieva, Tax Challenges in the Digital Economy, Directorate-General for Internal Policies, European Parliament, 2016; Marcel Olbert and Christoph Spengel, International Taxation in the Digital Economy: Challenge Accepted?, World Tax Journal, February 2017; Arthur Cockfield, Reforming the Permanent Establishment Principle Through Quantitative Economic Presence Test, 38 Can. Bus. L. J. 400, 2003; Lara Coelho Nogueira, European Commission’s proposal to implement a new permanent establishment nexus based on significant digital presence: is it compliant with the EU Law and international tax principles?,  Master’s Thesis, Master’s Programme in European and International Tax Law, Lund University (School of Economics and Management, Department of Law), June 2018.

[198] Digital Taxation Opens the Pandora Box: The OECD Interim Report and the European Commission Proposals, Croner-i.co.uk, Volume 46, Issue 6/7, 2019; Georg Kofler, Gunter Mayr, and Christoph Schlager, Taxation of the Digital Economy: ‘Quick Fixes’ or Long-Term Solution?, European Taxation (ibfd.org), December 2017; Peter Hongler and Pasquale Pistone, Blueprints for a New PE Nexus to Tax Business Income in the Era of the Digital Economy, IBFD White Paper (ibfd.org), January 20, 2015. Also see, Preventing the Artificial Avoidance of Permanent Establishment Status – Action 7: 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, 2015.

[199] See generally: John Harris, Without a fair tax on tech, it could be the end of the state as we know it, The Guardian, November 11, 2018; Sol Picciotto and Nicholas Shaxson, Make Corporate tax rules fair for all, Financial Times, November 19, 2012; Sol Picciotto, Taxing Multinational Enterprises as Unitary Firms, International Centre for Tax and Development, June 2016; Sol Picciotto (editor), Taxing Multinational Enterprises as Unitary Firms, Institute of Development Studies, 2017; Corporate Tax: Going After Google, The Economist, January 28, 2016; Rosanne Altshuler and Harry Grubert, Formula Apportionment: Is It Better Than the Current System and Are There Better Alternatives?, National Tax Journal, Volume 63, Issue 4, 2010; Reuven S. Avi-Yonah and Kimberly A. Clausing, Reforming Corporate Taxation in a Global Economy: A Proposal to Adopt Formulary Apportionment, Discussion paper, Washington, DC: The Hamilton Project, 2007; Digital Taxation Opens the Pandora Box: The OECD Interim Report and the European Commission Proposals, Croner-i.co.uk, Volume 46, Issue 6/7, 2019; Tas Bindi, EU launches public consultation on tax regime for tech companies: The European Commission is looking to implement a fairer, more effective, and unified tax regime next year that makes sense in the digital age, ZDnet.com, October 27, 2017; Corinne Reichert, Germany wants to halt US tech giant tax evasion: Report, ZDnet.com, October 22, 2018.Also see, for example, see: Tax challenges arising from digitalisation – Interim Report 2018, Eurofound.europa.eu, September 5, 2018; Tax Challenges Arising from Digitalisation – Interim Report 2018: Inclusive Framework on BEPS, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, 2018; Brief on the Tax Challenges Arising from Digitalisation: Interim Report 2018, oecd.org; 3 ways digitalisation is shaping the future of taxation, International Chamber of Commerce (iccwbo.org), March 7, 2018; Ashley Greenback and Riannon Kinghall Were, Taxing clicks: the European Commission’s new digital tax, Practical Law (uk.practicallaw.thomsonreuters.com), May 3, 2018.

[200] Lara Coelho Nogueira, European Commission’s proposal to implement a new permanent establishment nexus based on significant digital presence: is it compliant with the EU Law and international tax principles?,  Master’s Thesis, Master’s Programme in European and International Tax Law, Lund University (School of Economics and Management, Department of Law), June 2018. Also see, Addressing the Tax Challenges of the Digital Economy, Action 1 – 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, 2015; Tax Challenges Arising from Digitalisation – Interim Report 2018: Inclusive Framework on BEPS, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, 2018.

[201] Discussion on Corporate Taxation Challenges of the Digital Economy, Presidency Issues Note for the Informal ECOFIN Tallinn, September 16, 2017. Also see, Nancy Manzano, Bernadette Pinamont, and George Salis, Making the case for a global tax transformation, World Finance.com, January 23, 2018; Kamal Ahmed, EU pushes for new tax on tech giants ‘by Christmas’, BBC.com, October 10, 2018.

[202] John Harris, Without a fair tax on tech, it could be the end of the state as we know it, The Guardian, November 11, 2018.

[203] Sol Picciotto (editor), Taxing Multinational Enterprises as Unitary Firms, Institute of Development Studies, 2017 (chapter 2, Unitary Alternatives and Formulary Appointment, Sol Picciotto).

[204] John Harris, Without a fair tax on tech, it could be the end of the state as we know it, The Guardian, November 11, 2018; Sol Picciotto and Nicholas Shaxson, Make Corporate tax rules fair for all, Financial Times, November 19, 2012; Corporate Tax: Going After Google, The Economist, January 28, 2016.

[205] Prem Sikka, OECD’s new tax proposals won’t stop companies shifting profits to tax havens, The Conversation, October 6, 2015.

[206] John Harris, Without a fair tax on tech, it could be the end of the state as we know it, The Guardian, November 11, 2018; Sol Picciotto and Nicholas Shaxson, Make Corporate tax rules fair for all, Financial Times, November 19, 2012; Corporate Tax: Going After Google, The Economist, January 28, 2016; Sol Picciotto and Nicholas Shaxson, Make Corporate tax rules fair for all, Financial Times, November 19, 2012; Sol Picciotto (editor), Taxing Multinational Enterprises as Unitary Firms, Institute of Development Studies, 2017 (chapter 10, Lessons  from Existing Subnational Unitary and Formulary Apportionment Approaches for A Regional Transition to Unitary Taxation, Erika Dayle Siu, Milly I. Nalukwago and Marcos Aurélio Pereira Valadão).

[207] Business Taxes: How would formulary apportionment work?, Tax Policy Center.org.. Also see, Rosanne Altshuler and Harry Grubert, Formula Apportionment: Is It Better Than the Current System and Are There Better Alternatives?, National Tax Journal, Volume 63, Issue 4, 2010; Reuven S. Avi-Yonah and Kimberly A. Clausing, Reforming Corporate Taxation in a Global Economy: A Proposal to Adopt Formulary Apportionment, Discussion paper, Washington, DC: The Hamilton Project, 2007; Digital Taxation Opens the Pandora Box: The OECD Interim Report and the European Commission Proposals, Croner-i.co.uk, Volume 46, Issue 6/7, 2019; Sol Picciotto, Taxing Multinational Enterprises as Unitary Firms, International Centre for Tax and Development, June 2016; Sol Picciotto (editor), Taxing Multinational Enterprises as Unitary Firms, Institute of Development Studies, 2017.

[208] David Pegg, The tech giants will never pay their fair share of taxes – unless we make them, The Guardian, December 11, 2017; Gabriel Zucman, How Corporations and the Wealthy Avoid Taxes (and How to Stop Them), New York Times, November 10, 2017.

[209] Nancy Manzano, Bernadette Pinamont, and George Salis, Making the case for a global tax transformation, World Finance.com, January 23, 2018. Also see, Fair Taxation of the Digital Economy, ec.europa.eu, March 21, 2018:

“A digital platform will be deemed to have a taxable ‘digital presence’ or a virtual permanent establishment in a Member State if it fulfils one of the following criteria:

  • It exceeds a threshold of €7 million in annual revenues in a Member State
  • It has more than 100,000 users in a Member State in a taxable year
  • Over 3000 business contracts for digital services are created between the company and business users in a taxable year.

Also see, for example: Andrew Trotman, Apple founder Steve Wozniak: public anger at tax arrangements is ‘warranted’, Telegraph, May 30, 2013 (“… in order to make the tax system fairer, companies must pay tax on what they earn, as individuals do, rather than profits”.); Frederic Filloux, The Yellow Vests could cost the tech giants billions, Monday Note.com, December 16, 2018.

[210] Sol Picciotto (editor), Taxing Multinational Enterprises as Unitary Firms, Institute of Development Studies, 2017 (chapter 3, A Practical Approach to a Transition to Formulary Apportionment, Michael C. Durst). Also see, Michael C. Durst, The Tax Policy Outlook for Developing Countries: Reflections on International Formulary Apportionment, ICTD Working Paper 32, The International Centre for Tax and Development, 2015.

[211] David Pegg, The tech giants will never pay their fair share of taxes – unless we make them, The Guardian, December 11, 2017.

[212] Nancy Manzano, Bernadette Pinamont, and George Salis, Making the case for a global tax transformation, World Finance.com, January 23, 2018; Kamal Ahmed, EU pushes for new tax on tech giants ‘by Christmas’, BBC.com, October 10, 2018. Also see, Fair Taxation of the Digital Economy, ec.europa.eu, March 21, 2018.

[213] Mehreen Khan and Rochelle Toplensky, The EU’s ‘digital tax’: how US tech groups would be hit, Financial Times, March 21, 2018; Fair Taxation of the Digital Economy, ec.europa.eu, March 21, 2018; Nancy Manzano, Bernadette Pinamont, and George Salis, Making the case for a global tax transformation, World Finance.com, January 23, 2018. Also see, Andrew Trotman, Apple founder Steve Wozniak: public anger at tax arrangements is ‘warranted’, Telegraph, May 30, 2013 (“… in order to make the tax system fairer, companies must pay tax on what they earn, as individuals do, rather than profits”.); Frederic Filloux, The Yellow Vests could cost the tech giants billions, Monday Note.com, December 16, 2018.

[214] Business Among Friends: Why corporate tax dodgers are not yet losing sleep over global tax reform, Oxfam.org, May 2014. Also see, Eric Sigurdson, Corporate Strategy and Geopolitical Risk in a G-Zero World: Inequality, Polarized Democracies, and the shifting economic and political landscape, Sigurdson Post, May 31, 2018; Ivana Kottasova, Big Tech’s next European nightmare: A tax on revenues, CNN, October 31, 2018.

[215] Ivana Kottasova, Big Tech’s next European nightmare: A tax on revenues, CNN, October 31, 2018; Fair Taxation of the Digital Economy, ec.europa.eu, March 21, 2018; Business Among Friends: Why corporate tax dodgers are not yet losing sleep over global tax reform, Oxfam.org, May 2014.

[216] Viktoria Dendrinou, American Tech Giants Face New Tax Grab in Europe, Bloomberg, March 20, 2018; Andrew Hill, Mehreen Khan, and Richard Waters, The global hunt to tax Big Tech, Financial Times, November 2, 2018; Nikos Chrysoloras, Tech Tax Advocates Prepare Last-Ditch Push for EU Deal, Bloomberg, November 25, 2018; James Titcomb and Hannah Boland, Apple, Uber and Airbnb in firing line of tech tax, The Telegraph, November 3, 2018; Alex Webb, U.K. Tech Tax Would Be Both Pointless and Essential, Bloomberg, October 29, 2018; Madison Marriage and Aliya Ram, Big Tech faces UK tax on revenues, not profits, Financial Times, February 22, 2018; Nils Pratley, UK finally takes on arrogant tech giants with digital services tax, Guardian, October 29, 2018; Mehreen Khan, Alex Barker, and Rochelle Toplensky, Google, Facebook, and Apple face ‘digital tax’ on EU turnover, Financial Times, March 15, 2018.

[217] Alex Webb, U.K. Tech Tax Would Be Both Pointless and Essential, Bloomberg, October 29, 2018.

[218] Eric Sigurdson, Corporate Strategy and Geopolitical Risk in a G-Zero World: Inequality, Polarized Democracies, and the shifting economic and political landscape, Sigurdson Post, May 31, 2018.

[219] Dr. Madeleine Albright, Op-ed: Will We Stop Trump Before It’s Too Late – Dictators around the world have used President Trump’s own words to justify their repressive actions, New York Times, April 6, 2018; Michael Gordon, The UK’s Sovereignty Situation: Brexit, Bewilderment and Beyond …, King’s Law Journal, Vol. 27, Issue 3, 2016; Cheating may have swayed Brexit poll – Christopher Wylie, BBC.com, March 28, 2018; Thomas Colson, The Scottish government believes the Cambridge Analytica scandal could trigger a second Brexit referendum, Business Insider, March 29, 2018; Alan Dawson, Cambridge Analytica whistleblower Christopher Wylie supports a second Brexit referendum – here’s why, Business Insider, April 8, 2018; Fred Hiatt (Editorial Page Editor), McMaster warned against officials who ‘glamorize and apologize’ for dictators. Hmm, Washington Post, April 8, 2018.

[220] Torrey Taussig and Bruce Jones, Democracy in the new geopolitics, Brookings.edu, March 22, 2018. Also see, for example: James Bacchus, Might Unmakes Right: The American Assault on the Rule of Law in World Trade, Centre for International Governance Innovation (cigionline.org), May 2018.

[221] Klaus Schwab, Five Leadership priorities for 2017, World Economic Forum, January 2, 2017. Also see, for example: James Bacchus, Might Unmakes Right: The American Assault on the Rule of Law in World Trade, Centre for International Governance Innovation (cigionline.org), May 2018.

[222] Yelena Niazyan, Every Nation for Itself, World Policy, June 11, 2012. Also see, Ian Bremmer, Every Nation for Itself: Winners and Losers in a G-Zero World, Penguin Group, 2012; Eric Sigurdson, Corporate Strategy and Geopolitical Risk in a G-Zero World: Inequality, Polarized Democracies, and the shifting economic and political landscape, Sigurdson Post, May 31, 2018.

[223] Kamal Ahmed, EU pushes for new tax on tech giants ‘by Christmas’, BBC.com, October 10, 2018.

[224] Tax Challenges Arising from Digitalisation – Interim Report 2018: Inclusive Framework on BEPS, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, 2018; Brief on the Tax Challenges Arising from Digitalisation: Interim Report 2018, oecd.org.

[225] Pippa Crerar, UK will act alone against tech firm tax avoidance if global solution falters, Guardian, August 1, 2018.

[226] Sasja Beslik, Companies should be forced to say how much tax they pay and where, Guardian, November 11, 2016.

[227] Stian Reimers, When it comes to tax, how do we decide what’s fair, The Conversation, April 8, 2016; Thomas Walkom, Why, after years of ignoring tax havens, are governments paying attention?, Toronto Star, November 8, 2017; Lisa O’Carroll, If Google is in Ireland for tax reasons, why are most of its profits in Bermuda?, Guardian, March 24, 2011.

[228] Mehreen Khan and Rochelle Toplensky, The EU’s ‘digital tax’: how US tech groups would be hit, Financial Times, March 21, 2018.

[229] Nancy Manzano, Bernadette Pinamont, and George Salis, Making the case for a global tax transformation, World Finance.com, January 23, 2018; Kim Jaewon, Seoul moving to impose ‘digital tax’ on US tech companies, Nikkei Asian Review, October 3, 2018; Mehreen Khan and Rochelle Toplensky, The EU’s ‘digital tax’: how US tech groups would be hit, Financial Times, March 21, 2018; John Harris, Without a fair tax on tech, it could be the end of the state as we know it, The Guardian, November 11, 2018; OECD Work on Taxation: 2018-2019, The Organisation for Economic Co-operation and Development (oecd.org), 2018; David Pegg, The tech giants will never pay their fair share of taxes – unless we make them, The Guardian, December 11, 2017; Nick Miller, New ‘tech giant tax’ to stop Facebook, Amazon taking profits overseas, Sydney Morning Herald, October 30, 2018; Nils Pratley, UK finally takes on arrogant tech giants with digital services tax, Guardian, October 29, 2018; Alan Rappeport, Milan Schreuer, Jim Tankersley, and Natasha Singer, Europe’s Planned Digital Tax Heightens Tensions with U.S., New York Times, March 19, 2018.

[230] Budget 2018: Tech giants face digital services tax, BBC.co.uk, October 29, 2018.

[231] Leonid Bershidsky, The EU Digital Tax is Back and as Wrong as Ever, Bloomberg Opinion, March 16, 2018.

[232] Timothy Martin and Sam Schechner, Facebook, Google May Face Billions in New Taxes Across Asia, Latin America: Europe’s proposal to impose a new tax on tech giants is inspiring other governments, Wall Street Journal, October 28, 2018.

[233] John Christensen and Richard Murphy, The Social Irresponsibility of Corporate Tax Avoidance: Taking CSR to the Bottom Line, 47 Development 37, 2004.

[234] OECD Work on Taxation: 2018-2019, The Organisation for Economic Co-operation and Development (oecd.org), 2018.

[235] Don Pittis, Why tech giants don’t invest tax cuts in American jobs, CBC.ca, November 14, 2018.

[236] Fair Taxation of the Digital Economy, ec.europa.eu, March 21, 2018.

[237] Joseph Stiglitz, Globalisation isn’t just about profits. It’s about taxes too, Guardian, May 27, 2013.

[238] Kim Jaewon, Seoul moving to impose ‘digital tax’ on US tech companies, Nikkei Asian Review, October 3, 2018; Nick Miller, New ‘tech giant tax’ to stop Facebook, Amazon taking profits overseas, Sydney Morning Herald, October 30, 2018; Alex Webb, U.K. Tech Tax Would Be Both Pointless and Essential, Bloomberg, October 29, 2018.

[239] Andrew Ross Sorkin, BlackRock’s Message: Contribute to Society, or Risk Losing our Support, New York Times, January 15, 2018.

[240] Digital Taxation Opens the Pandora Box: The OECD Interim Report and the European Commission Proposals, Croner-i.co.uk, Volume 46, Issue 6/7, 2019.

[241] Joseph Stiglitz, Tax avoidance fuels global inequality, CNN, October 9, 2015. Also see, Andrew Trotman, Apple founder Steve Wozniak: public anger at tax arrangements is ‘warranted’, Telegraph, May 30, 2013 (“… in order to make the tax system fairer, companies must pay tax on what they earn, as individuals do, rather than profits”.).

[242] Oliver Wendell Holmes Jr, United States Supreme Court Justice, in the case of CompanIia General deTabacos de Filipinas v. Collector of Internal Revenue, 275 U.S. 87, 1927.

[243] Sol Picciotto (editor), Taxing Multinational Enterprises as Unitary Firms, Institute of Development Studies, 2017 (chapter 3, A Practical Approach to a Transition to Formulary Apportionment, Michael C. Durst).

[244] Loughlin Hickey, There is a Growing Consciousness of the Need for Change in Business, but How should this Change Happen?, Blueprint for Better Business.org, June 9, 2018.

[245] Andrew Ross Sorkin, BlackRock’s Message: Contribute to Society, or Risk Losing our Support, New York Times, January 15, 2018; Laurence Fink (Chairman and CEO, BlackRock), Larry Fink’s Annual Letter to CEOS: A Sense of Purpose, BlackRock.com, January 2018; Ben Marlow and Tim Wallace, ‘Larry’s Letter’ drives charge for reimagining of global capitalism, The Telegraph.co.uk, January 28, 2018.

[246] John Christensen and Richard Murphy, The Social Irresponsibility of Corporate Tax Avoidance: Taking CSR to the Bottom Line, 47 Development 37, 2004.

[247] Nicholas Lord, Tax avoidance might be legal but it’s time we seriously questioned its ethics, The Conversation, November 8, 2-17. Also see, Philippa Foster Back, Avoiding tax may be legal, but can it ever be ethical?, Guardian, April 23, 2013.

[248] Jasmine Fisher, Fairer Shores: Tax Havens, Tax Avoidance, and Corporate Social Responsibility, Boston University Law Review, Vol. 94, page 337, 2014. Also see, John Christensen and Richard Murphy, The Social Irresponsibility of Corporate Tax Avoidance: Taking CSR to the Bottom Line, 47 Development 37, 2004 (arguing that tax systems are crucial for the “infrastructure of justice” and thus tax avoidance should be a CSR issue); Lutz Preuss, Responsibility in Paradise? The Adoption of CSR Tools by Companies Domiciled in Tax Havens, Journal of Business Ethics, Vol. 110, Issue 1, 2012.

[249] Nancy Manzano, Bernadette Pinamont, and George Salis, Making the case for a global tax transformation, World Finance.com, January 23, 2018.