Transfer pricing and multinational financial institutions : the case for replacing arm’s length price with a unitary approach

The international tax system, designed a century ago, has not kept pace with the modern multinational entity rendering it ineffective in taxing many modern businesses according to economic activity. One of those modern multinational entities is the multinational financial institution (MNFI). The recent global financial crisis provides a particularly relevant and significant example of the failure of the current system on a global scale. The modern MNFI is increasingly undertaking more globalised and complex trading operations. A primary reason for the globalisation of financial institutions is that they typically ‘follow-the-customer’ into jurisdictions where international capital and international investors are required. The International Monetary Fund (IMF) recently reported that from 1995-2009, foreign bank presence in developing countries grew by 122 per cent. The same study indicates that foreign banks have a 20 per cent market share in OECD countries and 50 per cent in emerging markets and developing countries. Hence, most significant is that fact that MNFIs are increasingly undertaking an intermediary role in developing economies where they are financing core business activities such as mining and tourism. IMF analysis also suggests that in the future, foreign bank expansion will be greatest in emerging economies. The difficulties for developing countries in applying current international tax rules, especially the current traditional transfer pricing regime, are particularly acute in relation to MNFIs, which are the biggest users of tax havens and offshore finance. This paper investigates whether a unitary taxation approach which reflects economic reality would more easily and effectively ensure that the profits of MNFIs are taxed in the jurisdictions which give rise to those profits. It has previously been argued that the uniqueness of MNFIs results in a failure of the current system to accurately allocate profits and that unitary tax as an alternative could provide a sounder allocation model for international tax purposes. This paper goes a step further, and examines the practicalities of the implementation of unitary taxation for MNFIs in terms of the key components of such a regime, along with their their implications. This paper adopts a two-step approach in considering the implications of unitary taxation as a means of improved corporate tax coordination which requires international acceptance and agreement. First, the definitional issues of the unitary MNFI are examined and second, an appropriate allocation formula for this sector is investigated. To achieve this, the paper asks first, how the financial sector should be defined for the purposes of unitary taxation and what should constitute a unitary business for that sector and second, what is the ‘best practice’ model of an allocation formula for the purposes of the apportionment of the profits of the unitary business of a financial institution.

Demand-side response model to avoid spike of electricity price

The aim of this work is to develop a demand-side-response model, which assists electricity consumers exposed to the market price to independently and proactively manage air-conditioning peak electricity demand. The main contribution of this research is to show how consumers can optimize the energy cost caused by the air conditioning load considering to several cases e.g. normal price, spike price, and the probability of a price spike case. This model also investigated how air-conditioning applies a pre-cooling method when there is a substantial risk of a price spike. The results indicate the potential of the scheme to achieve financial benefits for consumers and target the best economic performance for electrical generation distribution and transmission. The model was tested with Queensland electricity market data from the Australian Energy Market Operator and Brisbane temperature data from the Bureau of Statistics regarding hot days from 2011 to 2012.

Investigation of the effects of various types of wind turbine generators on power-system stability

It has become more and more demanding to investigate the impacts of wind farms on power system operation as ever-increasing penetration levels of wind power have the potential to bring about a series of dynamic stability problems for power systems. This paper undertakes such an investigation through investigating the small signal and transient stabilities of power systems that are separately integrated with three types of wind turbine generators (WTGs), namely the squirrel cage induction generator (SCIG), the doubly fed induction generator (DFIG), and the permanent magnet generator (PMG). To examine the effects of these WTGs on a power system with regard to its stability under different operating conditions, a selected synchronous generator (SG) of the well-known Western Electricity Coordinating Council (WECC three-unit nine-bus system and an eight-unit 24-bus system is replaced in turn by each type of WTG with the same capacity. The performances of the power system in response to the disturbances are then systematically compared. Specifically, the following comparisons are undertaken: (1) performances of the power system before and after the integration of the WTGs; and (2) performances of the power system and the associated consequences when the SCIG, DFIG, or PMG are separately connected to the system. These stability case studies utilize both eigenvalue analysis and dynamic time-domain simulation methods.

Defining expected cost for the air conditioning to avoid a price spike of electricity market under DSR model

This work presents a demand side response model (DSR) which assists small electricity consumers, through an aggregator, exposed to the market price to proactively mitigate price and peak impact on the electrical system. The proposed model allows consumers to manage air-conditioning when as a function of possible price spikes. The main contribution of this research is to demonstrate how consumers can minimise the total expected cost by optimising air-conditioning to account for occurrences of a price spike in the electricity market. This model investigates how pre-cooling method can be used to minimise energy costs when there is a substantial risk of an electricity price spike. The model was tested with Queensland electricity market data from the Australian Energy Market Operator and Brisbane temperature data from the Bureau of Statistics during hot days on weekdays in the period 2011 to 2012.

Wide area controls for transient and dynamic stability enhancement

This paper presents a study done into the effectiveness of using local acceleration measurements vs. remote angle measurements in providing stabilising control via SVCs following large disturbances. The system studied was an analogue of the Queensland-New South Wales Interconnection (QNI) and involved the control of an existing Static Var Compensators (SVC) at Sydney West. This study is placed in the context of wide area controls for large systems using aggregated models for groups of machines.

Switching radical stability by pH-induced orbital conversion

In most radicals the singly occupied molecular orbital (SOMO) is the highest-energy occupied molecular orbital (HOMO); however, in a small number of reported compounds this is not the case. In the present work we expand significantly the scope of this phenomenon, known as SOMO-HOMO energy-level conversion, by showing that it occurs in virtually any distonic radical anion that contains a sufficiently stabilized radical (aminoxyl, peroxyl, aminyl) non-pi-conjugated with a negative charge (carboxylate, phosphate, sulfate). Moreover, regular orbital order is restored on protonation of the anionic fragment, and hence the orbital configuration can be switched by pH. Most importantly, our theoretical and experimental results reveal a dramatically higher radical stability and proton acidity of such distonic radical anions. Changing radical stability by 3-4 orders of magnitude using pH-induced orbital conversion opens a variety of attractive industrial applications, including pH-switchable nitroxide-mediated polymerization, and it might be exploited in nature.

Bauxite residue neutralisation precipitate stability in acidic environments

This investigation used a combination of techniques, such as X-ray diffraction, inductively coupled plasma optical emission spectroscopy and infrared spectroscopy, to determine the dissolution mechanisms of the Bayer precipitate and the associated rate of dissolution in acetic, citric and oxalic acid environments. The Bayer precipitate is a mixture of hydrotalcite, calcium carbonate and sodium chloride that forms during the seawater neutralisation of Bayer liquors (waste residue of the alumina industry). The dissolution rate of a Bayer precipitate is found to be dependent on (1) the strength of the organic acid and (2) the number of donating H+ ions. The dissolution mechanism for a Bayer precipitate consists of several steps involving: (1) the dissolution of CaCO3, (2) formation of whewellite (calcium oxalate) when oxalic acid is used and (3) multiple dissolution steps for hydrotalcite that are highly dependent on the pH of solution. The decomposition of the Al–OH hydrotalcite layers resulted in the immediate formation of Al(OH)3, which is stable until the pH decreases below 5.5. This investigation has found that the Bayer precipitate is stable across a wide pH range in the presence of common organic acids found in the rhizosphere, and that initial decomposition steps are likely to be beneficial in supporting plant growth through the release of nutrients such as Ca2þ and Mg2þ.

IT governance stability in a political changing environment : exploring potential impacts in the public sector

Public sector organisations (PSOs) operate in information-intensive environments often within operational contexts where efficiency is a goal. What's more, the rapid adoption of IT is expected to facilitate good governance within public sector organisations but it often clashes with the bureaucratic culture of these organisations. Accordingly, models such as IT Governance (ITG) and government reform -in particular the new public management (NPM)- were introduced in PSOs in an effort to address the inefficiencies of bureaucracy and under performance. This work explores the potential effect of change in political direction and policy on the stability of IT governance in Australian public sector organisations. The aim of this paper is to examine implications of a change of government and the resulting political environment on the effectiveness of the audit function of ITG. The empirical data discussed here indicate that a number of aspects of audit functionality were negatively affected by change in political direction and resultant policy changes. The results indicate a perceived decline in capacity and capability which in turn disrupts the stability of IT governance systems in public sector organisations.

Stability of the bituminous coal microstructure upon exposure to high pressures of helium

Small-angle neutron scattering (SANS) and ultra-small-angle neutron scattering (USANS) measurements of the structure of two Australian bituminous coals (particle size of 1-0.5 mm) before, during, and after exposure to 155 bar of helium were made to identify any effects of pressure alone on the pore size distribution of coal and any irreversible effects upon exposure to high pressures of helium in the pore size range from 3 nm to 10 μm. No irreversible effects upon exposure were identified for any pore size. No effects of pressure on pore size distribution were observed, except for a small effect at a pore size of about 2 μm for one coal. This study provides a convenient baseline for SANS and USANS investigations on sorption of gases at elevated pressures on coals, by distinguishing between the effect of pressure alone on coal pore size distribution and against the effect of the gas to be investigated.

New criterion for the stability of a human body in floodwaters

The authors must be congratulated for their original and important study. The flooding of urbanised areas constitutes a hazard to the population and infrastructure. Floods through inundated urban environments have been studied only recently and few considered the potential impact of flowing waters on pedestrians...

Distamycin A affects the stability of NF-kappaB p50-DNA complexes in a sequence-dependent manner

The effect of two different DNA minor groove binding molecules, Hoechst 33258 and distamycin A, on the binding kinetics of NF-κB p50 to three different specific DNA sequences was studied at various salt concentrations. Distamycin A was shown to significantly increase the dissociation rate constant of p50 from the sequences PRDII (5′-GGGAAATTCC-3′) and Ig-κ B (5′-GGGACTTTCC-3′) but had a negligible effect on the dissociation from the palindromic target-κB binding site (5′-GGGAATTCCC-3′). By comparison, the effect of Hoechst 33258 on binding of p50 to each sequence was found to be minimal. The dissociation rates for the protein–DNA complexes increased at higher potassium chloride concentrations for the PRDII and Ig-κB binding motifs and this effect was magnified by distamycin A. In contrast, p50 bound to the palindromic target-κB site with a much higher intrinsic affinity and exhibited a significantly reduced salt dependence of binding over the ionic strength range studied, retaining a KD of less than 10 pM at 150 mM KCl. Our results demonstrate that the DNA binding kinetics of p50 and their salt dependence is strongly sequence-dependent and, in addition, that the binding of p50 to DNA can be influenced by the addition of minor groove-binding drugs in a sequence-dependent manner.

Stability of endoglucanases from mesophilic fungus and thermophilic bacterium in acidified polyols

Recent developments in chemical pretreatments of lignocellulosic biomass using polyols as co-solvents (e.g., glycerol and ethylene glycol) at temperatures less than 100 °C may allow the effective use of thermostable and non-thermostable cellulases in situ during the saccharification process. The potential of biomass saccharifying enzymes, endoglucanases (EG) from a thermophilic bacterium (Thermotoga maritima) and a mesophilic fungus (Trichoderma longibrachiatum), to retain their activity in aqueous buffer, acidified glycerol, and acidified ethylene glycol used as co-solvents at pretreatment temperatures at or below 100 °C were examined. The results show that despite its origin, T. longibrachiatum EG (Tl-EG) retained 75% of its activity after exposure to 100 °C for 5 min in aqueous buffer while T. maritima EG (Tm-EG) retained only 5% activity. However, at 90 °C both enzymes retained over 87% of their activity. In acidified (0.1% (w/w) H2SO4) glycerol, Tl-EG retained similar activity (80%) to that obtained in glycerol alone, while Tm-EG retained only 35%. With acidified ethylene glycol under these conditions, both Tl-EG and Tm-EG retained 36% of their activity. The results therefore show that Tl-EG is more stable in both acidified glycerol and ethylene glycol than Tm-EG. A preliminary kinetic study showed that pure glycerol improved the thermal stability of Tl-EG but destabilized Tm-EG, relative to the buffer solution. The half-lives of both Tl-EG and Tm-EG are 4.5 min in acidified glycerol, indicating that the effectiveness of these enzymes under typical pretreatment times of greater than 15 min will be considerably diminished. Attempts have been made to explain the differences in the results obtained between the two enzymes.

A nonlinear observer for estimating transverse stability parameters of marine surface vessels

This paper presents a nonlinear observer for estimating parameters associated with the restoring term of a roll motion model of a marine vessel in longitudinal waves. Changes in restoring, also referred to as transverse stability, can be the result of changes in the vessel's centre of gravity due to, for example, water on deck and also in changes in the buoyancy triggered by variations in the water-plane area produced by longitudinal waves -- propagating along the fore-aft direction along the hull. These variations in the restoring can change dramatically the dynamics of the roll motion leading to dangerous resonance. Therefore, it is of interest to estimate and detect such changes.

An investigation of the pre-irradiation temporal stability of PAGAT gel dosimeter

In this work we examine two aspects of the PAGAT gel dosimeter. The first aspect studied is determination of a stable range of concentrations of the anti-oxidant Tetrakis Hydroxy Phosphonium Chloride (THPC). Once the desired THPC concentration is determined, we proceed to an investigation into the effect of pre-irradiation storage time and how this affects the dose response of the gel.

Parameter estimation of structural commodity price models

Commodity price modeling is normally approached in terms of structural time-series models, in which the different components (states) have a financial interpretation. The parameters of these models can be estimated using maximum likelihood. This approach results in a non-linear parameter estimation problem and thus a key issue is how to obtain reliable initial estimates. In this paper, we focus on the initial parameter estimation problem for the Schwartz-Smith two-factor model commonly used in asset valuation. We propose the use of a two-step method. The first step considers a univariate model based only on the spot price and uses a transfer function model to obtain initial estimates of the fundamental parameters. The second step uses the estimates obtained in the first step to initialize a re-parameterized state-space-innovations based estimator, which includes information related to future prices. The second step refines the estimates obtained in the first step and also gives estimates of the remaining parameters in the model. This paper is part tutorial in nature and gives an introduction to aspects of commodity price modeling and the associated parameter estimation problem.