The corporate tax of the future
DOI:
https://doi.org/10.51302/rcyt.2017.4489Keywords:
corporate tax, tax flow tax, destination-based taxAbstract
In 2016 the US Republican Party published its Blueprint for tax reform which included the rather unusual proposal of substituting the Corporate Tax by a new tax on corporations based on the destination principle on a cash-flow basis. This type of tax is considered to have the very enticing attributes of promoting growth and job creation and ending the thin-captialisation and transfer pricing problems.
Since then, a number of publications, conferences and debates about the Destination-Based Cash Flow Tax have emerged, especially when the Republicans draw the elections in November 2016. DBCFT may be a radical innovation if it really has the properties it announces. In such case, it has the potential to transform the corporate tax globally, hence the importance of the topic.
This article describes the tax, its pros and cons, and the possibilities of the Blueprint becoming law with the consequences it would bear for the rest of countries and jurisdictions.
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References
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