Workshop on International Law, Natural Resources and Sustainable
Development
Unitary Taxation of TNCs and its Relevance for Natural Resource Industries
Sol Picciotto
School of Law, University of Lancaster
Heightened concern about the impact of international tax avoidance by transnational
corporations (TNCs) has led to new pressures for the radical revision of international
corporate tax rules. The project on `base erosion and profit shifting’, initiated in its usual
low-key way by the OECD’s Tax Centre in 2012 was given a strong political momentum by
the G20, resulting in an action plan put forward in July 2013. This initiative, the details of
which are not known at this time of writing, is likely to contribute to a growing momentum
to change the basis of taxation of TNCs, towards a unitary approach. This paper will sketch
out the historical development of the tax rules for TNCs, showing the increasingly
dysfunctional nature. It will then outline alternative approaches to profit apportionment
based on a unitary approach, and strategies for a transition. Finally, it will consider the
implications of such a system for the natural resource sector.