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Wednesday, October 10, 2012

Marian Presents Jurisdiction to Tax Corporations at University of British Columbia

MarianOmri Marian (Florida) presented Jurisdiction to Tax Corporations at the University of British Columbia yesterday as part of its National Centre for Business Law Speakers Series hosted by David Duff:

Deciding whether a country can exert tax jurisdiction over corporations is an issue grounded in a dichotomy between formal and factual considerations. Justifications for one approach or the other are for the most part normative. However, this dichotomy provides little guidance for formulating workable corporate tax-residency tests. Dichotomy-driven corporate tax-residency arguments cannot be rationalized in the context of theories justifying corporate taxation to begin with. Indeed, comparative histories demonstrate that corporate tax-residency tests were instrumentally-, rather than normatively, rationalized when created. Changes in historical circumstances but stagnant tax-residency tests resulted in meaningless corporate tax-residence concepts. Instead, I develop what I believe to be the first cohesive functional-model for corporate tax-residency determination. Under the model, corporate tax-residency tests support the policy purposes for which different jurisdictions tax corporations. The model is versatile enough to recognize the possibility of multiplicity of such purposes, both among and within jurisdictions. Finally, I use the developed model to review corporate tax-residence determination in the United States. I conclude that under a functional approach the United States should reform the way it defines “domestic” corporations and adopt a two-pronged corporate tax-residency rule: place of management-and-control or place of public listing.

http://taxprof.typepad.com/taxprof_blog/2012/10/marian-presents.html

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