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
Image of Global Minimum Tax: An easy fix?

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
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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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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
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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
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
View of a spherical globe set amongst a city skyline

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
Image of close up of building with interlocking circular pattern on façade

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
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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
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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
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Global value chains and the case for a tax re-think

You may have seen my posts from Davos following rich discussions on our current economic and political climate, and its impact on tax. I am encouraged to see that these discussions will continue long after the flags have been put away.  

05 Feb 2018
2 min
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Responsible Corporate Tax Practice - The need for better collaboration between business and civil society

Over the past decade, seldom has a month gone by without the subject of corporate tax avoidance making headlines.

24 Aug 2017
4 min
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Advancing Responsible Corporate Tax Practice – A Route Forward

In ActionAid’s regular discussions with corporates on the subject of tax, there is a strikingly common theme in what we’re told by business leaders – namely, that whilst tax avoidance is indeed a problem, the tax affairs of their own businesses are beyond reproach.  

15 May 2017
3 min
Image of Corporate tax in 5 1/2 minutes

Corporate tax in 5 1/2 minutes

To build a robust and productive conversation about tax, it can be helpful to start with some reflection on how taxes have come into our societies in the first place.  

20 Mar 2017
1 min
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Responsible corporate tax governance and action

8 men own the same wealth as the bottom half of the world’s population. Extreme inequality is out of control and without tackling it we will not end poverty. We need to move to a human economy that is built on cooperation and more redistributive policies, especially fairer tax systems. Because taxation is without a doubt the most sustainable form...

28 Feb 2017
3 min
Image of a large circular window on a building

In 2017 low tax demands high social value

The trend for low tax rates to stimulate corporate behaviour is likely to be accelerated in 2017. A US administration that wants to use low tax rates to “re-patriot” cash and investment will add fuel to the fire of global tax competition that will put the laudable BEPS initiatives into the shade. That does not mean that they are conflicting...

20 Feb 2017
2 min

Contributors

We are grateful to all of our contributors, including:

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

Loughlin Hickey, Founding Trustee of Blueprint for Better Business and Senior Adviser to Blueprint

Loughlin Hickey

Founding Trustee of Blueprint for Better Business and Senior Adviser to Blueprint at

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