The case for unitary taxation with formulary apportionment in the finance sector and the effect on developing nations

In 2013 the OECD released its 15 point Action plan to deal with base erosion and profit shifting (BEPS). In that plan it was recognised that BEPS has a significant effect on developing countries. This is because the lack of tax revenue can lead to a critical underfunding of public investment that would help promote economic growth. To this end, the BEPS project is aimed at ensuring an inclusive approach to take into account not only views of the G20 and OECD countries but also the perspective of developing nations. With this focus in mind and in the context of developing nations, the purpose of this article is to consider a possible solution to profit shifting which occurs under the current transfer pricing regime, with that solution being unitary taxation with formulary apportionment. It does so using the finance sector as a specific case for application. Multinational financial institutions (MNFIs) play a significant role in financing activities of their clients in developing nations. Consistent with the ‘follow-the-client’ phenomenon which explains financial institution expansion, these entities are increasingly profiting from activities associated with this growing market. Further, not only are MNFIs persistent users of tax havens but also, more than other industries, have opportunities to reduce tax through transfer pricing measures. This article establishes a case for an industry specific adoption of unitary taxation with formulary apportionment as a viable alternative to the current regime. It argues that such a model would benefit not only developed nations but also developing nations which are currently suffering the effects of BEPS. In doing so, it considers the practicalities of such an implementation by examining both definitional issues and a possible formula for MNFIs. This article argues that, while there would be implementation difficulties to overcome, the current domestic models of formulary apportionment provide important guidance as to how the unitary business and business activities of MNFIs should be defined as well as factors that should be included in an allocation formula, along with the appropriate weighting. While it would be difficult for developing nations to adopt such a regime, it is argued that it would be no more difficult than addressing issues they face with the current transfer pricing regime. As such, this article concludes that unitary taxation with formulary apportionment is a viable industry specific alternative for MNFIs which would assist developing nations and aid independent fiscal soundness.

Towards development of a rapid and effective non-destructive testing strategy to identify brominated flame retardants in the plastics of consumer products

Polybrominated diphenyl ethers (PBDEs) are a class of brominated flame retardants (BFRs) once extensively used in the plastics of a wide range of consumer products. The listing of certain congeners that are constituents of commercial PBDE mixtures (including c-octaBDE) in the Stockholm Convention and tightening regulation of many other BFRs in recent years have created the need for a rapid and effective method of identifying BFR-containing plastics. A three-tiered testing strategy comparing results from non-destructive testing (X-ray fluorescence (XRF)) (n = 1714), a surface wipe test (n = 137) and destructive chemical analysis (n = 48) was undertaken to systematically identify BFRs in a wide range of consumer products. XRF rapidly identified bromine in 92% of products later confirmed to contain BFRs. Surface wipes of products identified tetrabromobisphenol A (TBBPA), c-octaBDE congeners and BDE-209 with relatively high accuracy (> 75%) when confirmed by destructive chemical analysis. A relationship between the amounts of BFRs detected in surface wipes and subsequent destructive testing shows promise in predicting not only the types of BFRs present but also estimating the concentrations present. Information about the types of products that may contain persistent BFRs will assist regulators in implementing policies to further reduce the occurrence of these chemicals in consumer products.

Using global formulary apportionment for international profit allocation: The case of Indonesia's mining industry

My thesis examined an alternative approach, referred to as the unitary taxation approach to the allocation of profit, which arises from the notion that as a multinational group exists as a single economic entity, it should be taxed as one taxable unit. The plausibility of a unitary taxation regime achieving international acceptance and agreement is highly contestable due to its implementation issues, and economic and political feasibility. Using a case-study approach focusing on Freeport-McMoRan and Rio Tinto's mining operations in Indonesia, this thesis compares both tax regimes against the criteria for a good tax system - equity, efficiency, neutrality and simplicity. This thesis evaluates key issues that arise when implementing a unitary taxation approach with formulary apportionment based on the context of mining multinational firms in Indonesia.

Recovery and succession in a multi-species tropical seagrass meadow following experimental disturbance: the role of sexual and asexual reproduction

Recolonisation and succession in a multi-species tropical seagrass meadow was examined by creating gaps (50×50 cm) in the meadow and manipulating the supply of sexual and asexual propagules. Measurements of leaf shoot density and estimates of above-ground biomass were conducted monthly to measure recovery of gaps between September 1995 and November 1997. Measurements of the seeds stored in the sediment (seed bank) and horizontal rhizome growth of colonising species were also conducted to determine their role in the recovery process. Asexual colonisation through horizontal rhizome growth from the surrounding meadow was the main mechanism for colonisation of gaps created in the meadow. The seed bank played no role in recolonisation of cleared plots. Total shoot density and above-ground biomass (all species pooled) of cleared plots recovered asexually to the level of the undisturbed controls in 10 and 7 months, respectively. There was some sexual recruitment into cleared plots where asexual colonisation was prevented but seagrass abundance (shoot density and biomass) did not reach the level of unmanipulated controls. Seagrass species did not appear to form seed banks despite some species being capable of producing long-lived seeds. The species composition of cleared plots remained different to the undisturbed controls throughout the 26-month experiment. Syringodium isoetifolium was a rapid asexual coloniser of disturbed plots and remained at higher abundances than in the control treatments for the duration of the study. S. isoetifolium had the fastest horizontal rhizome growth of species asexually colonising cleared plots (6.9 mm day−1). Halophila ovalis was the most successful sexual coloniser but was displaced by asexually colonising species. H. ovalis was the only species observed to produce fruits during the study. Small disturbances in the meadow led to long-term (>2 years) changes in community composition. This study demonstrated that succession in tropical seagrass communities was not a deterministic process. Variations in recovery observed for different tropical seagrass communities highlighted the importance of understanding life history characteristics of species within individual communities to effectively predict their response to disturbance. A reproductive strategy involving clonal growth and production of long-lived, locally dispersed seeds is suggested which may provide an evolutionary advantage to plants growing in tropical environments subject to temporally unpredictable major disturbances such as cyclones

Effect of microwave radiation on seed mortality of rubber vine (Cryptostegia grandiflora R.Br.), parthenium (Parthenium hysterophorous L.) and bellyache bush (Jatropha gossypiifolia L.)

A trial was undertaken to evaluate the effect of microwaves on seed mortality of three weed species. Seeds of rubber vine (Cryptostegia grandiflora R.Br.), parthenium (Parthenium hysterophorous L.) and bellyache bush (Jatropha gossypiifolia L.) were buried at six depths (0, 2.5, 5, 10, 20 and 40 cm) in coarse sand maintained at one of two moisture levels, oven dry or wet (field capacity), and then subjected to one of five microwave radiation durations of (0, 2, 4, 8 and 16 min). Significant interactions between soil moisture level, microwave radiation duration, seed burial depth and species were detected for mortality of seeds of all three species. Maximum seed mortality of rubber vine (88%), parthenium (67%) and bellyache bush (94%) occurred in wet soil irradiated for 16 min. Maximum seed mortality of rubber vine and bellyache bush seeds occurred in seeds buried at 2.5 cm depth whereas that of parthenium occurred in seeds buried at 10 cm depth. Maximum soil temperatures of 114.1 and 87.5°C in dry and wet soil respectively occurred at 2.5 cm depth following 16 min irradiation. Irrespective of the greater soil temperatures recorded in dry soil, irradiating seeds in wet soil generally increased seed mortality 2.9-fold compared with dry soil. Moisture content of wet soil averaged 5.7% compared with 0.1% for dry soil. Results suggest that microwave radiation has the potential to kill seeds located in the soil seed bank. However, many factors, including weed species susceptibility, determine the effectiveness of microwave radiation on buried seeds. Microwave radiation may be an alternative to conventional methods at rapidly depleting soil seed banks in the field, particularly in relatively wet soils that contain long lived weed seeds.

Applications of pedigree-based genome mapping in wheat and barley breeding programs.

The aim of the pedigree-based genome mapping project is to investigate and develop systems for implementing marker assisted selection to improve the efficiency of selection and increase the rate of genetic gain in breeding programs. Pedigree-based whole genome marker application provides a vehicle for incorporating marker technologies into applied breeding programs by bridging the gap between marker-trait association and marker implementation. We report on the development of protocols for implementation of pedigree-based whole genome marker analysis in breeding programs within the Australian northern winter cereals region. Examples of applications from the Queensland DPI&F wheat and barley breeding programs are provided, commenting on the use of microsatellites and other types of molecular markers for routine genomic analysis, the integration of genotypic, phenotypic and pedigree information for targeted wheat and barley lines, the genomic impacts of strong selection pressure in case study pedigrees, and directions for future pedigree-based marker development and analysis.

Deriatives disclosure in corporate annual reports: bank analysts; perceptions of usefulness

Responding to mixed evidence on the decision-usefulness of annual report disclosures for derivative financial instruments to capital market participants, and concerns identified by practice, this paper examines usefulness in a direct study of user perceptions. Interviews with analysts from Australia’s four major banks reveal essential usefulness, limited by the disclosures’ failure to reflect companies’ actual use of derivatives throughout the period, and inability of users to understand companies’ off-balance sheet risk and risk management practices from information considered generic and boilerplate. The research complements and extends existing archival and survey research and provides new evidence suggesting low-cost ways for increasing usefulness. It supports the International Accounting Standards Board’s disclosure recommendations in its recent Discussion Paper: A Review of the Conceptual Framework for Financial Reporting, but, at the same time, highlights that for these proposed measures to be successful in relation to IFRS 7, they may need to address other issues. The research increases knowledge of the informational requirements of lenders, an important class of financial information user, and supports calls from practice for companies to improve their disclosure of material economic risks.

In vitro propagation of Corymbia torelliana x C. citriodora (Myrtaceae) via cytokinin-free node culture

Hybrids between Corymbia torelliana (F.Muell.) K.D.Hill & L.A.S.Johnson and C. citriodora subsp. variegata (F.Muell.) A.R.Bean & M.W.McDonald are used extensively to establish forestry plantations in subtropical Australia. Methods were developed for in vitro seed germination, shoot multiplication and plantlet formation that could be used to establish in vitro and ex vitro clone banks of juvenile Corymbia hybrids. Effects of sodium hypochlorite concentration and exposure time on seed contamination and germination, and effects of cytokinin and auxin concentrations on shoot multiplication and subsequent rooting, were assessed. A two-step surface sterilisation procedure, involving 70% ethanol followed by 1% sodium hypochlorite, provided almost no contamination and at least 88% germination. A novel method of cytokinin-free node culture proved most effective for in vitro propagation. Lateral bud break of primary shoots was difficult to induce by using cytokinin, but primary shoots rooted prolifically, elongated rapidly and produced multiple nodes in the absence of exogenous cytokinin. Further multiplication was obtained either by elongating lateral shoots of nodal explants in cytokinin-free medium or by inducing organogenic callus and axillary shoot proliferation with 2.2 µm benzyladenine. Plantlets were produced using an in vitro soil-less method that provided extensive rooting in sterile propagation mixture. These methods provide a means for simultaneous laboratory storage and field-testing of clones before selection and multiplication of desired genotypes.

Progress towards the eradication of mikania vine (Mikania micrantha) and limnocharis (Limnocharis flava) in northern Australia.

To eradicate a weed invasion, its extent must be delimited and each infestation must be extirpated. Measures for both of these criteria are utilized to assess the progress of current eradication programs targeting mikania vine and limnocharis in northern Australia. The known infested area for each species is less than 5 ha and has remained largely static for the last 3 or more years against a backdrop of refined and enhanced detection methods. This suggests that delimitation has been approached, if not achieved. Different methods of detection have their places, relative to the stage of the program and the spatial distribution of infestations. Although all known infestations of both species are effectively monitored and controlled, ongoing emergence from persistent seed banks limits progress towards the extirpation of infestations to a slow, but measurable, rate. Nomenclature: Glyphosate. N-phosphonomethyl)glycine; fluroxypyr, [(4-amino-3,5-dichloro-6-fluoro-2-pyridinyl)oxy]acetic acid; limnocharis, Limnocharis flava (L.) Buchenau LIFL5; mikania vine (mile-a-minute), Mikania micrantha Kunth MIKMI.

Buoyancy and germination of pond apple (Annona glabra L.) propagules in fresh and salt water

Stephen Setter, Melissa Setter, Michael Graham and Joe Vitelli recently published their paper 'Buoyancy and germination of pond apple (Annona glabra L.) propagules in fresh and salt water' in Proceedings of the 16th Australian Weeds Conference. Stephen also presented this paper at the conference. Pond apple is an aggressive woody weed which has invaded many wetlands, drainage lines and riparian systems across the Wet Tropics bioregion of Far North Queensland. Most fruit and seed produced by pond apple during the summer wet season fall directly into creeks, river banks, flood plains and swamps from where they are dispersed. They reported that pond apple seeds can float for up to 12 months in either fresh or salt water, with approximately 38% of these seeds germinating in a soil medium once removed from the experimental water tanks at South Johnstone. Their study suggested that the removal of reproductive trees from areas adjacent to creeks and rivers will have an immediate impact on potential spread of pond apple by limiting seed input into flowing water bodies.

Germination of Hymenachne amplexicaulis and H. acutigluma under contrasting light, temperature and nitrate regimes

A laboratory experiment compared germination of the invasive exotic grass Hymenachne amplexicaulis (Rudge) Nees and the native H. acutigluma (Steud.) Gilliland. Seeds of both species were exposed to combinations of light (constant dark, alternating dark/light or constant light), temperature (constant or alternating) and nitrate regimes (with or without the addition of KNO3). Three seed lots of H. amplexicaulis (fresh, two adn four months old) and one of H. acutigluma (fresh seed) were tested. A significant temperature x light x nitrate x seed lot interaction occured. At a constant temperature very few seeds of either H. amplexicaulis or H. acutigluma germinated, regardless of the light regime or addition of KNO3. Generally, maximum germination occurred under a combination of alternating temperature, the presence of light (either constant or alternating) and the addition of KNO3. The exception was four month stored H. amplexicaulis seed, which reached maximum germinaction without the need for KNO3. Fresh seed of both H. amplexicaulis and H. acutigluma exhibited similar germination requirements. These findings suggest that conditions that buffer seeds from light and/or temperature fluctuations could reduce germination and possibly extend the life of seed banks of both H. amplexicaulis and H. acutigluma. Conversely, for land managers trying to control the exotic H. amplexicaulis, activities that create more favourable conditions for germination may help deplete seed banks faster.

Implementation of parallel tridiagonal solvers for a heterogeneous computing environment

Tridiagonal diagonally dominant linear systems arise in many scientific and engineering applications. The standard Thomas algorithm for solving such systems is inherently serial forming a bottleneck in computation. Algorithms such as cyclic reduction and SPIKE reduce a single large tridiagonal system into multiple small independent systems which can be solved in parallel. We have developed portable cyclic reduction and SPIKE algorithm OpenCL implementations with the intent to target a range of co-processors in a heterogeneous computing environment including Field Programmable Gate Arrays (FPGAs), Graphics Processing Units (GPUs) and other multi-core processors. In this paper, we evaluate these designs in the context of solver performance, resource efficiency and numerical accuracy.

Seed persistence of the invasive aquatic plant, Gymnocoronis spilanthoides (Asteraceae)

Seed persistence of Gymnocoronis spilanthoides (D.Don) DC.; Asteraceae (Senegal tea), a serious weed of freshwater habitats, was examined in relation to burial status and different soil moisture regimes over a 3-year period. Seeds were found to be highly persistent, especially when buried. At the end of the experiment, 42.0%, 27.3% and 61.4% of buried seeds were viable following maintenance at field capacity, water logged and fluctuating (cycles of 1 week at field capacity followed by 3 weeks’ drying down) soil moisture conditions, respectively. Comparable viability values for surface-situated seeds were ~3% over all soil moisture regimes. Predicted times to1% viability are 16.2 years for buried seed and 3.8 years for surface-situated seed. Persistence was attributed primarily to the absence of light, a near-obligate requirement for germination in this species, although secondary dormancy was induced in some seeds. Previous work has demonstrated low fecundity in field populations of G. spilanthoides, which suggests that soil seed banks may not be particularly large. However, high levels of seed persistence, combined with ostensibly effective dispersal mechanisms, indicate that this weed may prove a difficult target for regional or state-wide eradication.