The taxation of multinational banks : alternative apportionment through a unitary taxation regime aligning with economic reality

The taxation of multinational banks currently is governed by the general principles of international tax. However, it is arguable that there are characteristics exclusive to multinational banks that may warrant the consideration of a separate taxing regime. This article argues that because of the unique nature of multinational banks, the traditional international tax rules governing jurisdiction to tax and allocation of income do not produce a result which is optimal, as it does not reflect economic reality. That is, the current system does not produce a result that accurately reflects the economic source of the income or the location of the economic activity. The suggested alternative is unitary taxation using global formulary apportionment. Formulary apportionment is considered as an alternative that reflects economic reality by recognising the unique nature of multinational banks and allocating the income to the location of the economic activity. The unique nature of multinational banking is recognised in the fact that formulary apportionment does not attempt to undertake a transactional division of a highly integrated multinational entity. Rather, it allocates income to the jurisdictions based on an economically justifiable formula. Starting from this recognition, the purpose of this article is to demonstrate that formulary apportionment is a theoretically superior (or optimal) model for the taxation of multinational banks. An optimal regime, for the purposes of this article, is considered to be one that distributes the taxing rights in an equitable manner between the relevant jurisdictions, while, simultaneously allowing decisions of the international banks to be tax neutral. In this sense, neutrality is viewed as an economic concept and equity is regarded as a legal concept. A neutral tax system is one in which tax rules do not affect economic choices about commercial activities. Neutrality will ideally be across jurisdictions as well as across traditional and non-traditional industries. The primary focus of this article is jurisdictional neutrality. A system that distributes taxing rights in an equitable manner between the relevant jurisdictions ensures that each country receives its fair share of tax revenue. Given the increase in multinational banking, jurisdictions should be concerned that they are receiving their fair share. Inter-nation equity is concerned with re-determining the proper division of the tax base among countries. Richard and Peggy Musgrave argue that sharing of the tax base by countries of source should be seen as a matter of inter-nation equity requiring international cooperation. The rights of the jurisdiction of residency will also be at issue. To this extent, while it is agreed that inter-nation equity is an essential attribute to an international tax regime, there is no universal agreement as to how to achieve it. The current system attempts to achieve such equity through a combined residency and source regime, with the transfer pricing rules used to apportion income between the relevant jurisdictions. However, this article suggests, that as an alternative to the current regime, equity would be achieved through formulary apportionment. Opposition to formulary apportionment is generally based on the argument that it is not a theoretically superior (or optimal) model because of the implementation difficulties. Yet these are two separate issues. As such, this article is divided into two core parts. The first part examines the theoretical soundness of the formulary apportionment model concluding that it is theoretically superior to the arm’s length pricing requirement of the traditional transfer pricing regime. The second part examines the practical implications of accepting formulary apportionment as an optimal model with a view to disclosing the issues that arise when a formulary apportionment regime is adopted. Prior to an analysis of the theoretical and practical application of formulary apportionment to multinational banks, the unique nature of these banks is considered. The article concludes that, while there are significant implementation, compliance, and enforcement issues to overcome, the unitary taxation model may be theoretically superior to the current arm’s length model which applies to multinational banks. This conclusion is based on the unitary taxation model providing greater alignment with the unique features of these banks.

The taxing effects of the advance pricing arrangement program: A review of APAs and their impact on stakeholders

The current transfer pricing rules contained in Australia’s taxation regime are designed to counter the underpayment of tax by businesses engaged in international related-party dealings. Currently, these transactions must take place at an arm’s length price, a requirement which is becoming increasingly difficult to demonstrate. This results in an increased risk of an audit by the Australian Taxation Office. If a taxpayer wishes to avoid the risk of an audit, and any ensuing penalties, there is one option: an advance pricing arrangement (‘APA’). An APA is an agreement whereby the future transfer pricing methodology to be used to determine the arm’s length price is agreed to by the taxpayer and the relevant tax authority or authorities. This article investigates the use of APAs as a solution to the problem of transfer pricing and considers their impact on stakeholders. It is argued that while APAs provide a valuable practical tool for multinational entities facing the challenges of the taxation of global trading under the current regime, they may not be a practical long term solution.

Taxation of multinational banks : using formulary apportionment to reflect economic reality (Part 2)

As stated in Part 1 of this article, formulary appointment does not attempt to undertake a transactional division of a highly integrated multinational entity; rather, it allocates income to the jurisdictions based on economically justifiable formula. This article argues that the unitary taxation model is superior to the current arms-lenght model for the taxation of multinational banks despite significant implementation, complicance and enforcement issues. Part one of the article gave some background on the taxation of multinational banks, followed by a discussion of their uniqueness, and the theoretical benefits of the unitary tax model for multinational banking. Part 2 below covers the practical implications of accepting formulary apportionment as an 'optimal' regime for taxing multinational banks.

Effectiveness of red light cameras on the right-angle crash involvement of motorcycles

Red light cameras (RLC) have been used to reduce right-angle collisions at signalized intersections. However, the effect of RLCs on motorcycle crashes has not been well investigated. The objective of this study is to evaluate the effectiveness of RLCs on motorcycle safety in Singapore. This is done by comparing their exposure, proneness of at-fault right-angle crashes as well as the resulting right-angle collisions at RLC with those at non-RLC sites. Estimating the crash vulnerability from not-at-fault crash involvements, the study shows that with a RLC, the relative crash vulnerability or crash-involved exposure of motorcycles at right-angle crashes is reduced. Furthermore, field investigation of motorcycle maneuvers reveal that at non-RLC arms, motorcyclists usually queue beyond the stop-line, facilitating an earlier discharge and hence become more exposed to the conflicting stream. However at arms with a RLC, motorcyclists are more restrained to avoid activating the RLC and hence become less exposed to conflicting traffic during the initial period of the green. The study also shows that in right-angle collisions, the proneness of at-fault crashes of motorcycles is lowest among all vehicle types. Hence motorcycles are more likely to be victims than the responsible parties in right-angle crashes. RLCs have also been found to be very effective in reducing at-fault crash involvements of other vehicle types which may implicate exposed motorcycles in the conflicting stream. Taking all these into account, the presence of RLCs should significantly reduce the vulnerability of motorcycles at signalized intersections.

g4c2c: A model for citizen engagement at arms' length from government

The recognition that Web 2.0 applications and social media sites will strengthen and improve interaction between governments and citizens has resulted in a global push into new e-democracy or Government 2.0 spaces. These typically follow government-to-citizen (g2c) or citizen-to-citizen (c2c) models, but both these approaches are problematic: g2c is often concerned more with service delivery to citizens as clients, or exists to make a show of ‘listening to the public’ rather than to genuinely source citizen ideas for government policy, while c2c often takes place without direct government participation and therefore cannot ensure that the outcomes of citizen deliberations are accepted into the government policy-making process. Building on recent examples of Australian Government 2.0 initiatives, we suggest a new approach based on government support for citizen-to-citizen engagement, or g4c2c, as a workable compromise, and suggest that public service broadcasters should play a key role in facilitating this model of citizen engagement.

Physical and linkage maps for Drosophila serrata, a model species for studies of clinal adaptation and sexual selection

Drosophila serrata is a member of the montium group, which contains more than 98 species and until recently was considered a subgroup within the melanogaster group. This Drosophila species is an emerging model system for evolutionary quantitative genetics and has been used in studies of species borders, clinal variation and sexual selection. Despite the importance of D. serrata as a model for evolutionary research, our poor understanding of its genome remains a significant limitation. Here, we provide a first-generation gene-based linkage map and a physical map for this species. Consistent with previous studies of other drosophilids we observed strong conservation of genes within chromosome arms homologous with D. melanogaster but major differences in within-arm synteny. These resources will be a useful complement to ongoing genome sequencing efforts and QTL mapping studies in this species

Randomised controlled trial of an automated, interactive telephone intervention (TLC Diabetes) to improve type 2 diabetes management : Baseline findings and six-month outcomes

Background: Effective self-management of diabetes is essential for the reduction of diabetes-related complications, as global rates of diabetes escalate. Methods: Randomised controlled trial. Adults with type 2 diabetes (n = 120), with HbA1c greater than or equal to 7.5 %, were randomly allocated (4 × 4 block randomised block design) to receive an automated, interactive telephone-delivered management intervention or usual routine care. Baseline sociodemographic, behavioural and medical history data were collected by self-administered questionnaires and biological data were obtained during hospital appointments. Health-related quality of life (HRQL) was measured using the SF-36. Results: The mean age of participants was 57.4 (SD 8.3), 63 % of whom were male. There were no differences in demographic, socioeconomic and behavioural variables between the study arms at baseline. Over the six-month period from baseline, participants receiving the Australian TLC (Telephone-Linked Care) Diabetes program showed a 0.8 % decrease in geometric mean HbA1c from 8.7 % to 7.9 %, compared with a 0.2 % HbA1c reduction (8.9 % to 8.7 %) in the usual care arm (p = 0.002). There was also a significant improvement in mental HRQL, with a mean increase of 1.9 in the intervention arm, while the usual care arm decreased by 0.8 (p = 0.007). No significant improvements in physical HRQL were observed. Conclusions: These analyses indicate the efficacy of the Australian TLC Diabetes program with clinically significant post-intervention improvements in both glycaemic control and mental HRQL. These observed improvements, if supported and maintained by an ongoing program such as this, could significantly reduce diabetes-related complications in the longer term. Given the accessibility and feasibility of this kind of program, it has strong potential for providing effective, ongoing support to many individuals with diabetes in the future.

Recruitment and results of a pilot trial of vitamin D supplementation in the general population of Australia

Context: The benefits of high serum levels of 25-hydroxyvitamin D [25(OH)D] are unclear. Trials are needed to establish an appropriate evidence base. Objective: We plan to conduct a large-scale trial of vitamin D supplementation for the reduction of cancer incidence and overall mortality and report here the methods and results of a pilot trial established to inform its design. Design: Pilot D-Health was a randomized trial carried out in a general community setting with 12 months intervention and follow-up. Participants: Participants were 60- to 84-yr-old residents of one of the four eastern Australian states who did not have any vitamin D-related disorders and who were not taking more than 400 IU supplementary vitamin D per day. A total of 644 participants were randomized, and 615 completed the study (two persons withdrew because of nonserious adverse events). Interventions: The interventions were monthly doses of placebo or 30,000 or 60,000 IU vitamin D3. Main Outcomes: The main outcomes were the recruitment rate and changes in serum 25(OH)D. Results: Ten percent of those approached were recruited. At baseline, the mean 25(OH)D was 42 nmol/liter in all three study arms. The mean change in 25(OH)D in the placebo group was 0.12 nmol/liter, compared with changes of 22 and 36 nmol/liter in the 30,000- and 60,000-IU groups, respectively. Conclusions: The D-Health pilot has shown that a large trial is feasible in Australia and that a dose of 2000 IU/d will be needed to ensure that a large proportion of the population reaches the target serum 25(OH)D level. Copyright © 2012 by The Endocrine Society.

Structural dissection of Ebola virus and its assembly determinants using cryo-electron tomography

Ebola virus is a highly pathogenic filovirus causing severe hemorrhagic fever with high mortality rates. It assembles heterogenous, filamentous, enveloped virus particles containing a negative-sense, single-stranded RNA genome packaged within a helical nucleocapsid (NC). We have used cryo-electron microscopy and tomography to visualize Ebola virus particles, as well as Ebola virus-like particles, in three dimensions in a near-native state. The NC within the virion forms a left-handed helix with an inner nucleoprotein layer decorated with protruding arms composed of VP24 and VP35. A comparison with the closely related Marburg virus shows that the N-terminal region of nucleoprotein defines the inner diameter of the Ebola virus NC, whereas the RNA genome defines its length. Binding of the nucleoprotein to RNA can assemble a loosely coiled NC-like structure; the loose coil can be condensed by binding of the viral matrix protein VP40 to the C terminus of the nucleoprotein, and rigidified by binding of VP24 and VP35 to alternate copies of the nucleoprotein. Four proteins (NP, VP24, VP35, and VP40) are necessary and sufficient to mediate assembly of an NC with structure, symmetry, variability, and flexibility indistinguishable from that in Ebola virus particles released from infected cells. Together these data provide a structural and architectural description of Ebola virus and define the roles of viral proteins in its structure and assembly

A new first-order decision-making model for the procurement of public sector infrastructure: Procedures and Testing

Given global demand for new infrastructure, governments face substantial challenges in funding new infrastructure and delivering Value for Money (VfM). As part of the background to this challenge, a critique is given of current practice in the selection of the approach to procure major public sector infrastructure in Australia and which is akin to the Multi-Attribute Utility Approach (MAUA). To contribute towards addressing the key weaknesses of MAUA, a new first-order procurement decision-making model is presented. The model addresses the make-or-buy decision (risk allocation); the bundling decision (property rights incentives), as well as the exchange relationship decision (relational to arms-length exchange) in its novel approach to articulating a procurement strategy designed to yield superior VfM across the whole life of the asset. The aim of this paper is report on the development of this decisionmaking model in terms of the procedural tasks to be followed and the method being used to test the model. The planned approach to testing the model uses a sample of 87 Australian major infrastructure projects in the sum of AUD32 billion and deploys a key proxy for VfM comprising expressions of interest, as an indicator of competition.

Research supervision of international students in engineering and information technology disciplines (Resources)

This report provides an overview of the results of a collaborative research project titled "A model for research supervision of international students in engineering and information technology disciplines". This project aimed to identify factors influencing the success of culturally and linguistically diverse (CALD) higher degree research (HDR) students in the fields of Engineering and Information Technology at three Australian Universities: Queensland University of Technology, The University of Western Australia and Curtin University.

Brothers in arms – An experiment on the alliance puzzle

The generic alliance game considers players in an alliance who fight against an external enemy. After victory, the alliance may break up, and its members may fight against each other over the spoils of the victory. Our experimental analysis of this game shows: In-group solidarity vanishes after the break-up of the alliance. Former ‘brothers in arms’ fight even more vigorously against each other than strangers do. Furthermore, this vigorous internal fighting is anticipated and reduces the ability of the alliance to mobilize the joint fighting effort, compared to a situation in which victorious alliance members share the spoils of victory equally and peacefully

Results of a phase IIa clinical trial of an anti-inflammatory molecule, chaperonin 10, in multiple sclerosis

Background Chaperonin 10 (Cpn10) is a mitochondrial molecule involved in protein folding. The aim of this study was to determine the safety profile of Cpn10 in patients with multiple sclerosis (MS). Methods A total of 50 patients with relapse-remitting or secondary progressive MS were intravenously administered 5 mg or 10 mg of Cpn10 weekly for 12 weeks in a double-blind, randomized, placebo controlled, phase II trial. Clinical reviews, including Expanded Disability Status Scale and magnetic resonance imaging (MRI) with Gadolinium, were undertaken every 4 weeks. Stimulation of patient peripheral blood mononuclear cells with lipopolysaccharide ex vivo was used to measure the in vivo activity of Cpn10. Results No significant differences in the frequency of adverse events were seen between treatment and placebo arms. Leukocytes from both groups of Cpn10-treated patients produced significantly lower levels of critical proinflammatory cytokines. A trend toward improvement in new Gadolinium enhancing lesions on MRI was observed, but this difference was not statistically significant. No differences in clinical outcome measures were seen. Conclusions Cpn10 is safe and well tolerated when administered to patients with MS for 3 months, however, a further extended phase II study primarily focused on efficacy is warranted.

Phase III study of matrix metalloproteinase inhibitor prinomastat in non-small-cell lung cancer

Purpose: Matrix metalloproteinases (MMPs) degrade extracellular proteins and facilitate tumor growth, invasion, metastasis, and angiogenesis. This trial was undertaken to determine the effect of prinomastat, an inhibitor of selected MMPs, on the survival of patients with advanced non-small-cell lung cancer (NSCLC), when given in combination with gemcitabine-cisplatin chemotherapy. Patients and Methods: Chemotherapy-naive patients were randomly assigned to receive prinomastat 15 mg or placebo twice daily orally continuously, in combination with gemcitabine 1,250 mg/m2 days 1 and 8 plus cisplatin 75 mg/m2 day 1, every 21 days for up to six cycles. The planned sample size was 420 patients. Results: Study results at an interim analysis and lack of efficacy in another phase III trial prompted early closure of this study. There were 362 patients randomized (181 on prinomastat and 181 on placebo). One hundred thirty-four patients had stage IIIB disease with T4 primary tumor, 193 had stage IV disease, and 34 had recurrent disease (one enrolled patient was ineligible with stage IIIA disease). Overall response rates for the two treatment arms were similar (27% for prinomastat v 26% for placebo; P = .81). There was no difference in overall survival or time to progression; for prinomastat versus placebo patients, the median overall survival times were 11.5 versus 10.8 months (P = .82), 1-year survival rates were 43% v 38% (P = .45), and progression-free survival times were 6.1 v 5.5 months (P = .11), respectively. The toxicities of prinomastat were arthralgia, stiffness, and joint swelling. Treatment interruption was required in 38% of prinomastat patients and 12% of placebo patients. Conclusion: Prinomastat does not improve the outcome of chemotherapy in advanced NSCLC. © 2005 by American Society of Clinical Oncology.