Abstract
Purpose This paper aims to argue that the endogenous processes of profit shifting by MNEs and tax competition lead not just to inequality but constitute a case of global injustice. The provisions of the planned “two-pillar” reforms to global corporate taxation are then considered relative to the minimum conditions for background justice in taxation. Design/methodology/approach This paper is partly conceptual, based on relevant theoretical work in philosophy, and partly policy-focussed, based on an assessment of the OECD/G20 “two-pillar solution”. Findings The normative case for considering international tax competition as a global justice issue is developed, contrasting the cosmopolitan and non-cosmopolitan (“internationalist”) approaches. Three key minimum conditions for background justice in term of international taxation are established. This paper concludes that the two-pillar solution is likely to fail in global justice terms not because of its principles, which are sound, but because its redistributive scope is insufficiently great to have a major effect in correcting the inequality arising from tax competition. Originality/value This paper applies the philosophical concept of global justice to a specific issue in international business: MNE profit shifting and tax competition policy.
Published Version
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