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.

Structural behaviour and design of cold-formed steel wall systems under fire conditions

In recent times, light gauge steel framed (LSF) structures, such as cold-formed steel wall systems, are increasingly used, but without a full understanding of their fire performance. Traditionally the fire resistance rating of these load-bearing LSF wall systems is based on approximate prescriptive methods developed based on limited fire tests. Very often they are limited to standard wall configurations used by the industry. Increased fire rating is provided simply by adding more plasterboards to these walls. This is not an acceptable situation as it not only inhibits innovation and structural and cost efficiencies but also casts doubt over the fire safety of these wall systems. Hence a detailed fire research study into the performance of LSF wall systems was undertaken using full scale fire tests and extensive numerical studies. A new composite wall panel developed at QUT was also considered in this study, where the insulation was used externally between the plasterboards on both sides of the steel wall frame instead of locating it in the cavity. Three full scale fire tests of LSF wall systems built using the new composite panel system were undertaken at a higher load ratio using a gas furnace designed to deliver heat in accordance with the standard time temperature curve in AS 1530.4 (SA, 2005). Fire tests included the measurements of load-deformation characteristics of LSF walls until failure as well as associated time-temperature measurements across the thickness and along the length of all the specimens. Tests of LSF walls under axial compression load have shown the improvement to their fire performance and fire resistance rating when the new composite panel was used. Hence this research recommends the use of the new composite panel system for cold-formed LSF walls. The numerical study was undertaken using a finite element program ABAQUS. The finite element analyses were conducted under both steady state and transient state conditions using the measured hot and cold flange temperature distributions from the fire tests. The elevated temperature reduction factors for mechanical properties were based on the equations proposed by Dolamune Kankanamge and Mahendran (2011). These finite element models were first validated by comparing their results with experimental test results from this study and Kolarkar (2010). The developed finite element models were able to predict the failure times within 5 minutes. The validated model was then used in a detailed numerical study into the strength of cold-formed thin-walled steel channels used in both the conventional and the new composite panel systems to increase the understanding of their behaviour under nonuniform elevated temperature conditions and to develop fire design rules. The measured time-temperature distributions obtained from the fire tests were used. Since the fire tests showed that the plasterboards provided sufficient lateral restraint until the failure of LSF wall panels, this assumption was also used in the analyses and was further validated by comparison with experimental results. Hence in this study of LSF wall studs, only the flexural buckling about the major axis and local buckling were considered. A new fire design method was proposed using AS/NZS 4600 (SA, 2005), NAS (AISI, 2007) and Eurocode 3 Part 1.3 (ECS, 2006). The importance of considering thermal bowing, magnified thermal bowing and neutral axis shift in the fire design was also investigated. A spread sheet based design tool was developed based on the above design codes to predict the failure load ratio versus time and temperature for varying LSF wall configurations including insulations. Idealised time-temperature profiles were developed based on the measured temperature values of the studs. This was used in a detailed numerical study to fully understand the structural behaviour of LSF wall panels. Appropriate equations were proposed to find the critical temperatures for different composite panels, varying in steel thickness, steel grade and screw spacing for any load ratio. Hence useful and simple design rules were proposed based on the current cold-formed steel structures and fire design standards, and their accuracy and advantages were discussed. The results were also used to validate the fire design rules developed based on AS/NZS 4600 (SA, 2005) and Eurocode Part 1.3 (ECS, 2006). This demonstrated the significant improvements to the design method when compared to the currently used prescriptive design methods for LSF wall systems under fire conditions. In summary, this research has developed comprehensive experimental and numerical thermal and structural performance data for both the conventional and the proposed new load bearing LSF wall systems under standard fire conditions. Finite element models were developed to predict the failure times of LSF walls accurately. Idealized hot flange temperature profiles were developed for non-insulated, cavity and externally insulated load bearing wall systems. Suitable fire design rules and spread sheet based design tools were developed based on the existing standards to predict the ultimate failure load, failure times and failure temperatures of LSF wall studs. Simplified equations were proposed to find the critical temperatures for varying wall panel configurations and load ratios. The results from this research are useful to both structural and fire engineers and researchers. Most importantly, this research has significantly improved the knowledge and understanding of cold-formed LSF loadbearing walls under standard fire conditions.

Equity for taxpayers within Australia’s retirement savings regime : a dissenting opinion

This article asks the question whether Australia’s retirement savings regime, specifically the superannuation component and the attached taxation concessions, is a regime which is equitable to all taxpayers. In a dissenting opinion, it is argued that the current regime, along with the changes proposed by the Federal Government in its response to the Henry Review, does not result in a retirement savings regime which benefits all taxpayers equally. As such, it is suggested that the only way to ensure an equitable regime is to incorporate a gender perspective into public finance analysis to determine how the retirement savings policies affect women and men differently. In doing so, a specific tax policy which provides for additional, fiscally significant concessions for taxpayers who do not fit the criteria of a ‘normal’ taxpayer, that is a taxpayer working as an employee in a full time position for an uninterrupted 35 years, should be incorporated into Australia’s current fiscal policy.

Using a thimble to drink from a fire hydrant: information anxiety and the third sector

In the last 10 years, the third sector has seen an eruption of texts, websites, discussion forums, conferences, new journals, new research centres and sector-specific degrees. This growing abundance of information allows for hitherto impossible networking, collaboration and general awareness of what is happening in the sector. At the same time, however, like staff in many industries, nonprofit professionals can suffer from an increasingly common 21st century malaise known as ‘information anxiety’. It is worth examining the sector through the lens of Information Studies theory, to question what the information technology needs of nonprofits are and how their information management techniques may differ from those in the public and private sectors. There are implications of this both for those within the industry (in terms of governance, training and public relations) and those external to it (who may form relationships with nonprofits on the basis of access to information).

The Attack on Political Correctness: Islamophobia and the Erosion of Multiculturalism In Australia Under the Howard Regime

This article reports on civil society in Australia between 1996 and 2007 related to former Prime Minister John Howard. The article discusses Howard's neo-conservative ideology and Liberal-National coalition, noting his views on political correctness. Howard's administration is also discussed in terms of immigration, multiculturalism, indigenous land rights, othering, and Islamaphobia. Information on the effect of Islamaphobia on Australian perceptions and the treatment of Muslims is also provided

Numerical modelling of load bearing LSF Walls under fire conditions

Abstract. Fire safety of light gauge cold-formed steel frame (LSF) stud walls is significant in the design of buildings. In this research, finite element thermal models of both the traditional LSF wall panels with cavity insulation and the new LSF composite wall panels were developed to simulate their thermal behaviour under standard and real design fire conditions. Suitable thermal properties were proposed for plasterboards and insulations based on laboratory tests and literature review. The developed models were then validated by comparing their results with available fire test results. This paper presents the details of the developed finite element models of load bearing LSF wall panels and the thermal analysis results. It shows that finite element models can be used to simulate the thermal behaviour of load bearing LSF walls with varying configurations of insulations and plasterboards. Failure times of load bearing LSF walls were also predicted based on the results from finite element thermal analyses.

Numerical and experimental studies of cold-formed steel floor systems under standard fire conditions

Light gauge cold-formed steel frame (LSF) structures are increasingly used in industrial, commercial and residential buildings because of their non-combustibility, dimensional stability, and ease of installation. A floor-ceiling system is an example of its applications. LSF floor-ceiling systems must be designed to serve as fire compartment boundaries and provide adequate fire resistance. Fire rated floor-ceiling assemblies formed with new materials and construction methodologies have been increasingly used in buildings. However, limited research has been undertaken in the past and hence a thorough understanding of their fire resistance behaviour is not available. Recently a new composite panel in which an external insulation layer is used between two plasterboards has been developed at QUT to provide a higher fire rating to LSF floors under standard fire conditions. But its increased fire rating could not be determined using the currently available design methods. Research on LSF floor systems under fire conditions is relatively recent and the behaviour of floor joists and other components in the systems is not fully understood. The present design methods thus require the use of expensive fire protection materials to protect them from excessive heat increase during a fire. This leads to uneconomical and conservative designs. Fire rating of these floor systems is provided simply by adding more plasterboard sheets to the steel joists and such an approach is totally inefficient. Hence a detailed fire research study was undertaken into the structural and thermal performance of LSF floor systems including those protected by the new composite panel system using full scale fire tests and extensive numerical studies. Experimental study included both the conventional and the new steel floor-ceiling systems under structural and fire loads using a gas furnace designed to deliver heat in accordance with the standard time- temperature curve in AS 1530.4 (SA, 2005). Fire tests included the behavioural and deflection characteristics of LSF floor joists until failure as well as related time-temperature measurements across the section and along the length of all the specimens. Full scale fire tests have shown that the structural and thermal performance of externally insulated LSF floor system was superior than traditional LSF floors with or without cavity insulation. Therefore this research recommends the use of the new composite panel system for cold-formed LSF floor-ceiling systems. The numerical analyses of LSF floor joists were undertaken using the finite element program ABAQUS based on the measured time-temperature profiles obtained from fire tests under both steady state and transient state conditions. Mechanical properties at elevated temperatures were considered based on the equations proposed by Dolamune Kankanamge and Mahendran (2011). Finite element models were calibrated using the full scale test results and used to further provide a detailed understanding of the structural fire behaviour of the LSF floor-ceiling systems. The models also confirmed the superior performance of the new composite panel system. The validated model was then used in a detailed parametric study. Fire tests and the numerical studies showed that plasterboards provided sufficient lateral restraint to LSF floor joists until their failure. Hence only the section moment capacity of LSF floor joists subjected to local buckling effects was considered in this research. To predict the section moment capacity at elevated temperatures, the effective section modulus of joists at ambient temperature is generally considered adequate. However, this research has shown that it leads to considerable over- estimation of the local buckling capacity of joist subject to non-uniform temperature distributions under fire conditions. Therefore new simplified fire design rules were proposed for LSF floor joist to determine the section moment capacity at elevated temperature based on AS/NZS 4600 (SA, 2005), NAS (AISI, 2007) and Eurocode 3 Part 1.3 (ECS, 2006). The accuracy of the proposed fire design rules was verified with finite element analysis results. A spread sheet based design tool was also developed based on these design rules to predict the failure load ratio versus time, moment capacity versus time and temperature for various LSF floor configurations. Idealised time-temperature profiles of LSF floor joists were developed based on fire test measurements. They were used in the detailed parametric study to fully understand the structural and fire behaviour of LSF floor panels. Simple design rules were also proposed to predict both critical average joist temperatures and failure times (fire rating) of LSF floor systems with various floor configurations and structural parameters under any given load ratio. Findings from this research have led to a comprehensive understanding of the structural and fire behaviour of LSF floor systems including those protected by the new composite panel, and simple design methods. These design rules were proposed within the guidelines of the Australian/New Zealand, American and European cold- formed steel structures standard codes of practice. These may also lead to further improvements to fire resistance through suitable modifications to the current composite panel system.

The inherent international tax regime and its constraints on Australia's sovereignty

On 1 November 2011 the Minister for Financial Services and Superannuation, the Honourable Bill Shorten MP, announced that Australia would be undertaking a reform of the ‘transfer pricing rules in the income tax law and Australia’s future tax treaties to bring them into line with international best practice, improving the integrity and efficiency of the tax system.’ Mr Shorten stated that the reason for the reform was that ‘recent court decisions suggest our existing transfer pricing rules may be interpreted in a way that is out-of-kilter with international norms.’ Further, he stated that ‘the Government has asked the Treasury to review how the transfer pricing rules can be improved, including but not limited to how to be more in line with international best practice.’ He urged all interested parties to participate in this consultation process. On 16 March 2012, an Exposure Draft and accompanying Explanatory Memorandum outlining the proposed amendments to implement the first stage of the transfer pricing reforms were released. Within the proposed changes is the explicit embedding of the use of the OECD’s Model Tax Convention on Income and on Capital and Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations to help determine the arm’s length price. Does this mean that Australia engages in an international tax regime?

Australia's adoption of an international tax regime : to engage or not to engage?

On 1 November 2011 the Minister for Financial Services and Superannuation, the Honourable Bill Shorten MP, announced that Australia would be undertaking a reform of the ‘transfer pricing rules in the income tax law and Australia's future tax treaties to bring them into line with international best practice, improving the integrity and efficiency of the tax system.’ Mr Shorten stated that the reason for the reform was that ‘recent court decisions suggest our existing transfer pricing rules may be interpreted in a way that is out-of-kilter with international norms.’ Further, he stated that ‘the Government has asked the Treasury to review how the transfer pricing rules can be improved, including but not limited to how to be more in line with international best practice.’ He urged all interested parties to participate in this consultation process.

Fire Tests of Cold-formed Steel Wall Systems

Cold-formed steel stud walls are an important component of Light Steel Framing (LSF) building systems used in commercial, industrial and residential buildings. In the conventional LSF stud wall systems, thin-walled steel studs are protected from fire by placing one or two layers of plasterboard on both sides with or without cavity insulation. However, there is very limited data about the structural and thermal performance of these wall systems while past research showed contradicting results about the benefits of cavity insulation. This research proposed a new LSF stud wall system in which a composite panel made of two plasterboards with insulation between them was used to improve the fire rating of walls. Full scale fire tests were conducted using both conventional steel stud walls with and without the use of cavity insulation and the new composite panel system. Eleven full scale load bearing wall specimens were tested to study the thermal and structural performances of the load bearing wall assemblies under standard fire conditions. These tests showed that the use of cavity insulation led to inferior fire performance of walls while also providing good explanations and supporting test data to overcome the incorrect industry assumptions about cavity insulation. Tests demonstrated that the use of external insulation in a composite panel form enhanced the thermal and structural performances of stud walls and increased their fire resistance rating significantly. This paper presents the details of the full scale fire tests of load-bearing wall assemblies lined with plasterboards and different types of insulation under varying load ratios. Test results including the temperature and deflection profiles of walls measured during the fire tests will be presented along with their failure modes and failure times.

Experimental studies of non-load bearing steel wall systems under fire conditions

Fire safety of buildings has been recognised as very important by the building industry and the community at large. Traditionally, increased fire rating is provided by simply adding more plasterboards to light gauge steel frame (LSF) walls, which is inefficient. Many research studies have been undertaken to investigate the thermal behaviour of traditional LSF stud wall systems under standard fire conditions. However, no research has been undertaken on the thermal behaviour of LSF stud walls using the recently proposed composite panel. Extensive fire testing of both non-load bearing and load bearing wall panels was conducted in this research based on the standard time-temperature curve in AS1530.4. Three groups of LSF wall specimens were tested with no insulation, cavity insulation and the new composite panel based on an external insulation layer between plasterboards. This paper presents the details of this experimental study into the thermal performance of non-load bearing walls lined with various configurations of plasterboard and insulation. Extensive descriptive and numerical results of the tested non-load bearing wall panels given in this paper provide a thorough understanding of their thermal behaviour, and valuable time-temperature data that can be used to validate numerical models. Test results showed that the innovative composite stud wall systems outperformed the traditional stud wall systems in terms of their thermal performance, giving a much higher fire rating.

Fire tests of load bearing steel stud walls exposed to real building fires

Abstract. Fire resistance has become an important part in structural design due to the ever increasing loss of properties and lives every year. Conventionally the fire rating of load bearing Light gauge Steel Frame (LSF) walls is determined using standard fire tests based on the time-temperature curve given in ISO 834 [1]. Full scale fire testing based on this standard time-temperature curve originated from the application of wood burning furnaces in the early 1900s and it is questionable whether it truly represents the fuel loads in modern buildings. Hence a detailed fire research study into the performance of LSF walls was undertaken using real design fires based on Eurocode parametric curves [2] and Barnett’s ‘BFD’ curves [3]. This paper presents the development of these real fire curves and the results of full scale experimental study into the structural and fire behaviour of load bearing LSF stud wall systems.