Jurisdiction to tax corporations in a globalized economya critical analysis of current paradigms underlying corporate income taxes from the perspective of the benefit principle

Abstract

The main objectives we wish to pursue by means of the present thesis are described below: o Demonstrate the profit shifting phenomenon (i.e. the ability of companies to shift profits out of the jurisdictions where economic activities take place and further book them in the jurisdictions of their choice) through the example of a real multinational company (Apple), understand the real extent of the problem and identify the main rules that have presumably contributed to the final outcome in this specific case. o Examine the origins and rationale behind three paradigms commonly underlying corporate income taxation (the separate-entity approach along with the arm´s length standard, corporate tax residence and the permanent establishment threshold) and further demonstrate the essential role they play in the existence of the aforementioned phenomenon. o Explore the possibility of either abandoning these paradigms or altering their content bearing in mind the current economic, business and technological context and a set of policy principles we intend to use as guidelines.