Non-disclosure of geographic earnings can be a marker of income-shifting activities, new research out of the University of Toronto found.
US based, multinational corporations have not been required to disclose geographical earnings since 1998. Therefore, managers are able to move profits from high to low-tax foreign jurisdictions without the threat of exposure.
As a result, tax rates of non-disclosing companies are less than half of those that voluntarily disclose geographical earnings.
The report suggests tax dodging is more likely when companies avoid such disclosure.
R. Ambrose Raven
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A welcome change to have an article dealing with an important issue that implies an obvious solution. All profit-seeking businesses trading in Australia should be required to disclose their earnings from Australia on pain of substantial penalties, including a daily fine for as long as the breach continues.
Big Mining’s tax evasion is notorious. All the revenue earned by Glencoe from its "marketing" and "service" agreement with Xstrata, which increases Xstrata’s costs and therefore reduces its…
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