Under unitary taxation, multinational companies are treated as what they are: single businesses. Their global profits are aggregated, and the right to tax them is allocated among countries according to where the group’s economic activity takes place. Economic activity is usually measured using a formula that captures the factors contributing to multinational profits. Under a formula based on employment and sales, for instance, a country hosting 10% of a multinational’s employees and accounting for 10% of its sales would be allowed to tax 10% of the group’s global profits at its own rate. This would end profit shifting, create a
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