Corporate

Corporation Tax

Most corporations recognize the important role they play in contributing to society through job creation, innovation, and wealth generation.

Explore Corporation Tax

Most corporations recognize the important role they play in contributing to society through job creation, innovation, and wealth generation. However, the growing emphasis on ESG globally has led to increased focus on the importance of considering how that wealth is generated and how corporations can demonstrate that they are contributing positively to the societies in which they are a part, including through the tax they pay. There are increasing calls for multinationals to pay their “fair share” of tax, and, whether that comes from civil society or from institutions such as the European Commission, the definition of ‘fair’ when it comes to tax, means different things to different people.

The debate around corporation tax must look at the value chain of particular companies and the rules within the countries where the company operates. Many stakeholders believe that the current international tax accord, established in the 1920s, needs updating, which has led to the so-called Pillar One work carried out by the OECD/G20 Inclusive Framework (IF). The key debate in Pillar One is around the extent to which profits should be reallocated to market jurisdictions, with some arguing that existing corporation tax rules should be fundamentally changed and replaced with global formulary apportionment.

In addition to debates on the allocation of profits, concerns have been raised about countries that use tax rates to compete for international business. Some see them driving a “race to the bottom,” while others believe that low corporate tax rates incentivize companies to shift profits from high tax locations. This has led to the Pillar Two work of the IF, which looks at how to create minimum global tax rules.

Along with the global outlook, it is important to look at how domestic rules function. As part of the Responsible Tax roundtable series on tax policy post pandemic, a number of meetings were held looking at how tax policy could incentivize economic recovery.

Themes examined in this section include:

  • Pillar One of the OECD/G20 Inclusive Framework
  • Pillar Two of the OECD/G20 Inclusive Framework
  • The arm’s length principle and transfer pricing
  • The future of corporation tax
  • Formulary apportionment
  • The EU proposals for a Common Consolidated Corporate Tax Base (CCCTB) now rebranded as Business in Europe: Framework for Income Taxation (BEFIT)
  • Incentives to stimulate investment
  • Research and Development credits
  • Is there an optimal rate of corporation tax?
  • Loss utilisation
  • Avoidance and evasion

Explore Corporation Tax

Image of Tax can save the world

Tax can save the world

Co-written by Chris Morgan & Matthew Gwyther

18 Oct 2021
8 min
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Global Responsible Tax: Summer Newsletter

When KMPG International, in collaboration with Jericho Chambers, kicked off the Global Responsible Tax Project over six years ago, it was a challenge to gain traction. Now, global tax is on everyone’s agenda – from COP26 to the OECD, the EU, the G7 and G20.

09 Sep 2021
1 min
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Global Minimum Tax: An easy fix?

By Melissa Geiger, KPMG in the UK Partner and Global Lead: Strategic Corporates Tax and Legal, KPMG International, and Sharon Baynham Director of Tax Policy, KPMG in the UK – This article explores some of the impacts of a global minimum tax regime, particularly in the light of recent US announcements and considers some of the consequences a global minimum tax may have on future government policy.

09 Sep 2021
14 min
Image looking up to circular roof light

Is corporation tax good or bad for growth?

  • Business requires a stable society to which it should contribute.
  • Business pays taxes on production, people, property and environmental impact, as well as income.
  • A tax system needs to be crafted to incentivize investment and growth, through dialogue with all stakeholders...
19 Jul 2021
4 min
Looking up in the inside of a circular building

Making Carbon Border Adjustment proposals WTO-compliant

KPMG’s Global Responsible Tax Project recently held a roundtable in collaboration with KPMG IMPACT, to look at the technical difficulties of designing a Carbon Border Adjustment Mechanism (CBAM).

25 Mar 2021
1 min
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Post-COVID stimulus measures in Africa and the ASPAC region

On 14 July KPMG International and Jericho Chambers sponsored the second in a series of roundtables on tax policy responses to COVID-19. 

10 Aug 2020
6 min
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EU stimulus measures in a post-COVID world

No pressure to reduce corporation tax rates generally; any cost based incentives should be targeted, temporary and timely; multilateral approaches and cooperation are needed to avoid adverse spill overs, tax competition and a growth in compliance and double taxation. There is support of the work of the OECD on Pillars 1 and 2 as well as for a European common...

10 Aug 2020
11 min
Image looking up towards a tall corporate tower through a circular building

Public Tax Reporting - What Can We Learn From Company Experience?

It wasn’t so long ago that corporate tax policy and practice was considered almost exclusively the domain of tax departments and revenue authorities. But this is no longer the case: corporate tax is an issue that is debated and contested firmly within the public sphere. The days of tax as a back office function are over. 

30 Aug 2019
2 min
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An inquiry into the future of corporate taxation in an era of digitization

In this article, Paul Gisby, Senior Manager at Accountancy Europe – shares his views on the first provocation. Understanding the challenges of corporate taxation in a digitized, globalized economy is one of the key focus areas for the Responsible Tax project in 2019. An initial provocation was published in the spring and a Think Piece is scheduled for the autumn. This...

30 Aug 2019
7 min
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An inquiry into the future of corporate taxation in an era of digitization

In this article, Dr Charles Enoch, formerly Deputy Director at the International Monetary Fund and currently European Studies Centre Visiting Fellow, St Antony's College, Oxford – shares his views on the first provocation. Understanding the challenges of corporate taxation in a digitized, globalized economy is one of the key focus areas for the Responsible Tax project in 2019. An initial...

14 Aug 2019
2 min
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An inquiry into the future of corporate taxation in an era of digitization

In this article, Stella Raventós-Calvo, Chair of The Fiscal Committee – shares her views on the first provocation. Understanding the challenges of corporate taxation in a digitized, globalized economy is one of the key focus areas for the Responsible Tax project in 2019. An initial provocation was published in the Spring and a Think Piece is scheduled for the autumn....

14 Aug 2019
9 min
Image looking through a circular tunnel to a corporate building scene

Brussels Round Table on the Future of Corporation Tax

New and big pressures are building that are going to force change on the global tax system. There are many concerns: growing inequality within countries and the shift of income away from labour to capital which has occurred over the last 50 years; aging populations; how best to tackle climate change; more generally, how to finance the UN Sustainable Development...

02 Aug 2019
11 min
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Talk Tax, not Trust

“Trust” — in business and politics — has been spoken about and even over explained to the point of exhaustion. We have written elsewhere that the so-called crisis of trust is in fact a crisis of leadership — with “trust” often used as an easy proxy for anything and everything that goes wrong and the response being “to re-build it”.But...

15 Apr 2019
4 min
Aerial view of a circular building

Note of roundtable on the future of corporation tax in Cape Town - 25 March 2019

The latest in a series of roundtables was held in Cape Town on 25 March which looked at the challenges in the global tax system, specifically in relation to corporation tax and whether the current system is fit for purpose in 21st century Africa. The attendees at the roundtable included clients from a number of different sectors, tax authority and...

15 Apr 2019
9 min
Looking up at a building through a circular aperture

Note of roundtable on the future of corporation tax in Nairobi on 15 March 2019

A roundtable on the future of corporation tax and the OECD’s consultation on the impact of digitalization was held in Nairobi on 15 March 2019. The clients attending were from a range of industries including banking, private equity, oil and gas, and logistics.A theme which emerged was that renegotiating the global accord on international tax is not the highest priority...

04 Apr 2019
5 min
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Corporation tax and the responsible tax debate

Last month we released our publication, co-edited with Jericho Chambers, called What to Tax?1 The booklet recognises that “Whether we look at developed countries, with aging populations and growing health and social security bills, or at developing countries needing funds to finance the UN Sustainable Development Goals, it is clear that there is pressure to widen and deepen the...

28 Nov 2018
7 min
Looking down a circular glass tunnel towards a corporate looking building

Future of the Corporate Income Tax in the world: Is this the end of the CIT as we know it?

On Friday 14th of September I attended the 2nd Tallinn Tax Conference entitled Future of the Corporate Income Tax in the World: is this the end of the CIT as we know it? Chaired by Dmitri Jegorov, Deputy Secretary-General, Ministry of Finance, Estonia, it was a fascinating debate looking at whether corporation tax is fit for purpose in the 21st...

27 Sep 2018
9 min

Contributors

We are grateful to all of our contributors, including:

David Linke, Global Head of Tax and Legal Services, KPMG International

David Linke

Global Head of Tax and Legal Services at KPMG International

Sharon Baynham, Director, Tax Policy, KPMG in the UK

Sharon Baynham

Director, Tax Policy at KPMG in the UK

Melissa Geiger, Global Leader, Strategic Corporates, Tax & Legal, KPMG International, and Partner and UK Board Member, KPMG in the UK, KPMG International

Melissa Geiger

Global Leader, Strategic Corporates, Tax & Legal, KPMG International, and Partner and UK Board Member, KPMG in the UK at KPMG International

Chris Morgan, Head of Global Tax Policy, KPMG LLP

Chris Morgan

Head of Global Tax Policy at KPMG LLP

Stella Raventós-Calvo, Chair of The Fiscal Committee, CFE

Stella Raventós-Calvo

Chair of The Fiscal Committee at CFE

Paul Gisby, Senior Manager, Accountancy Europe

Paul Gisby

Senior Manager at Accountancy Europe

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