draining development.pdf - Khazar University

Accounting for the Missing Billions 271Multinational Corporations and Their Tax RatesData sourcesThis part of the chapter seeks to compare the corporate tax rates offeredby a wide range of jurisdictions over time. The basic data source for thetime series data on tax rates used in this report is the annual corporate taxrate reviews published by KPMG, a Big Four firm of accountants andbusiness advisers. KPMG has been publishing the reviews since 1996,and, although the jurisdictions reviewed have varied slightly over theperiod, the data have always covered between 60 and 70 jurisdictions ineach annual report up to and through 2008, all of which have beenincluded in the current survey. The KPMG data consistently cover 30OECD countries and the 15 preenlargement members of the EuropeanUnion (EU). The other jurisdictions surveyed vary widely. A consistentfeature is that few of the places are recognized secrecy jurisdictions. Thedata on populations and gross domestic product (GDP) used in this partof the chapter were extracted from the CIA World Factbook in July 2009. 5As a result of the omission of tax rate data for secrecy jurisdictions, analternative data source for these locations has been used. Given that theKPMG data were, without doubt, produced for marketing purposes,another, similar source has been sought. The source the author of thechapter has settled on is a data set downloaded from OCRA Worldwide. 6These data, which were extracted in November 2008, relate to the corporatetax rates of secrecy jurisdictions as applied to foreign source income.This is relevant for the purpose of this review because one is concernedwith transfer pricing, and the income that will pass through these locationsin connection with intragroup trades is likely to be considered foreignsource income in these jurisdictions; the tax rates provided byOCRA will therefore be the appropriate tax rates to consider.MethodologyThe KPMG data are summarized in table 9A.1. 7 The data are categorizedaccording to the following characteristics for the purposes of theanalysis:1. Whether or not the jurisdiction was a member of the OECD2. Whether or not the jurisdiction was one of the 15 EU preenlargementstates (the EU15)