TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Tuesday, April 4, 2017

Devereux & Vella Present Destination-Based Cash Flow Taxation Today At Georgetown

DVMichael Devereux & John Vella (Oxford University Centre for Business Taxation) present Destination-Based Cash Flow Taxation (with Alan Auerbach (UC-Berkeley) & Michael Keen (International Monetary Fund)) at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks and Itai Grinberg:

This paper sets out a possible approach to the international taxation of corporate profit: a destination-based cash flow tax (DBCFT). This option is one of a number that have been considered over the last three years by a group of economists and lawyers, chaired by Michael Devereux. The other current members of the group are Alan Auerbach, Michael Keen, Paul Oosterhuis, Wolfgang Schön and John Vella. ...

The paper shows that the DBCFT is equivalent in economic terms to a reform that introduces a broad-based, uniform rate VAT (or achieves the same effect through an existing VAT), and reduces taxes on payroll by the same proportion. Each of these two options has advantages and disadvantages in terms of implementation, which are set out and discussed in the paper.

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