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.

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.

Green buildings for greying people : a case study of a retirement village in Australia

Purpose With an increasingly ageing population and widespread acceptance of the need for sustainable development in Australia, the demand for green retirement villages is increasing. This paper aims to identify the critical issues to be considered by developers and practitioners when embarking on their first green residential retirement project in Australia. Design/methodology/approach In view of the lack of adequate historical data for quantitative analysis, a case study approach is employed to examine the successful delivery of green retirement villages. Face-to-face interviews and document analysis were conducted for data collection. Findings The findings of the study indicate that one of the major obstacles to the provision of affordable green retirement villages is the higher initial costs involved. However, positive aspects were identified, the most significant of which relate to: the innovative design of site and floor plans; adoption of thermally efficient building materials; orientation of windows; installation of water harvesting and recycling systems, water conservation fittings and appliances; and waste management during the construction stage. With the adoption of these measures, it is believed that sustainable retirement development can be achieved without significant additional capital costs. Practical implications The research findings serve as a guide for developers in decision making throughout the project life-cycle when introducing green features into the provision of affordable retirement accommodation. Originality/value This paper provides insights into the means by which affordable green residential retirement projects for aged people can be successfully completed.

Potential retrofitting of existing campus buildings to green buildings

Green building is building that the focus is to maximize the energy efficiency and resources used. While, retrofitting is the process of renovate or refurnish the existing building. Therefore by retrofit existing buildings that comply with green building requirement, it improves the environmental attributes of the buildings. In Malaysia, existing buildings and its communities contribute over 40% of green house gases to the environment. This paper describes a study that explores the potential to retrofit existing campus buildings that response to sustainable green building standard. A validation survey was carried out and the data collected was analysed using SPSS in order to confirm the significance of retrofitting Universiti Teknologi Malaysia (UTM) buildings toward green building initiative. The results show that all the twenty eight identified green elements recorded average index of higher than 3.5 which means that there is significant needs to retrofit the existing buildings to green buildings. This study concludes that it is urgently need for the campus to response to green building requirements in order to achieve higher energy effeciency and this can be done through effective etrofitting of existing buildings.

Vertical particle concentration profiles around urban office buildings

Despite its role in determining both indoor and outdoor human exposure to anthropogenic particles, there is limited information describing vertical profiles of particle concentrations in urban environments, especially for ultrafine particles. Furthermore, the results of the few studies performed have been inconsistent. As such, this study aimed to assess the influence of vehicle emissions and nucleation formation on particle characteristics (particle number size distribution-PNSD and PM 2.5 concentration) at different heights around three urban office buildings located next to busy roads in Brisbane, Australia, and place these results in the broader context of the existing literature. Two sets of instruments were used to simultaneously measure PNSD, particle number (PN) and PM 2.5 concentrations, respectively, for up to three weeks at each building. The results showed that both PNSD and PM 2.5 concentration around building envelopes were influenced by vehicle emissions and new particle formation, and that they exhibited variability across the three different office buildings. During nucleation events, PN concentration in size range of <30 nm and total PN concentration increased (7-65% and 5-46%, respectively), while PM 2.5 concentration decreased (36-52%) with height. This study has shown an under acknowledged role for nucleation in producing particles that can affect large numbers of people, due to the high density and occupancy of urban office buildings and the fact that the vast majority of people's time is spent indoors. These findings highlight important new information related to the previously overlooked role of particle formation in the urban atmosphere and its potential effects on selection of air intake locations and appropriate filter types when designing or upgrading mechanical ventilation systems in urban office buildings. The results also serve to better define particle behaviour and variability around building envelopes, which has implications for studies of both human exposure and particle dynamics. © 2012 Author(s).

Health monitoring of buildings during construction and service stages using vibration characteristics

Columns and walls in buildings are subjected to a number of load increments during the construction and service stages. The combination of these load increments and poor quality construction can cause defects in these structural components. In addition, defects can also occur due to accidental or deliberate actions by users of the building during construction and service stages. Such defects should be detected early so that remedial measures can be taken to improve life time serviceability and performance of the building. This paper uses micro and macro model upgrading methods during construction and service stages of a building based on the mass and stiffness changes to develop a comprehensive procedure for locating and detecting defects in columns and walls of buildings. Capabilities of the procedure are illustrated through examples.

Taxation of multinational banks : using formulary apportionment to reflect economic reality

The taxation of multinational banks is currently governed by general principles of international tax. However, there are characteristics exclusive to multinational banks that may warrant consideration of a separate taxing regime, as 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.

More food banks than MacDonalds : the future of civil society?

The title of this paper came out of a conversation I had on a recent trip to Canada. I had gone there because I wanted to spend a bit of time seeing how non-government organisations in Canada were faring in this age of re inventing government. Osborne and Gaebler (1992) I wanted to try and understand whether there were any lessons in the Canadian experience, that might be relevant for Australia. As I hope to demonstrate while there are both similarities and differences, the questions facing both nations have a remarkable correspondence.

Sustainable education buildings in Australia : a green star review

In order to promote green building practice in Australia, the Green Building Council of Australia (GBCA) launched the Green Star rating tools for various types of buildings built since 2003. Of these, the Green Star-Education rating tool addresses sustainability issues during the design and construction phrases of education facility development. It covers a number of categories, including Management, Indoor Environment Quality, Energy, Transport, Water, Materials, Land Use & Ecology, Emissions and Innovation. This paper reviews the use of the Green Star system in Australian education facilities construction and the potential challenges associated with Green Star- Education implementation. Score sheets of 34 education projects across Australia that achieved Green Star certification were collected and analysed. The percentage of green star points obtained within each category and sub-category (credits) for each project were analysed to illustrate the achievement of credits. The results show that management-related credits and ecology-related credits are the easiest and most difficult to obtain respectively. The study also indicted that 6 Green Star education projects obtained particularly high percentages in the Innovation category. The investigation of points obtained in each category provides prospective Green Star applicants with insights into credit achievement for future projects.

Lateral movements in composite high-rise buildings under seismic action

Daring human nature has already led to the construction of high-rise buildings in naturally challenging geological regions and in worse environments of the world. However; literature review divulges that there is a lag in research of certain generic principles and rules for the prediction of lateral movement in multistorey construction. The present competitive trend orders the best possible used of available construction material and resources. Hence; the mixed used of reinforced concrete with structural steel is gaining prevalence day by day. This paper investigates the effects of Seismic load on composite multistorey building provided with core wall and trusses through FEM modelling. The results showed that increased rigidity corresponds to lower period of vibration and hence higher seismic forces. Since Seismic action is a function of mass and response acceleration, therefore; mass increment generate higher earthquake load and thus cause higher impact base shear and overturning movement. Whereas; wind force depends on building exposed, larger the plan dimension greater is the wind impact. Nonetheless; outriggers trusses noticeably contribute, in improving the serviceability of structure subjected to wind and earthquake forces.