Event description
Disputes over who creates value – and where – are central to distributive conflicts, from struggles over wages and unpaid care work, to debates over where multinational corporations should be taxed and so on. Yet it was only about a decade ago that these debates entered international tax negotiations in a systematic way. In 2013, in the context of the OECD/G20 BEPS Action Plan, the G20 called on the OECD to align taxation with value creation. Although framed at a high level, this mandate went on to shape much of the subsequent debate on base erosion and profit shifting. “Value creation” has since become both a central organising concept and a major battleground in contemporary international tax policymaking. At the same time, the concept has been met with sustained criticism, particularly from developing countries. Throughout the BEPS process, the mantra of “aligning transfer pricing outcomes with value creation” was often seen as reinforcing existing asymmetries in the international tax system. Critics also argued that the concept could enable profit shifting to low-tax jurisdictions.
In the current negotiations for a UN Framework Convention on International Tax Cooperation (UNFCITC), the “fair allocation of taxing rights” is emerging as one of the most fundamental commitments states are expected to assume under the Convention. As the draft text currently stands, delegates may agree to language stating that taxing rights over income, or parts of income, belong, inter alia, to jurisdictions in which value is created. Against this backdrop, and given the concept’s contested history, this panel will revisit the battleground of “value creation”: examining its origins in international taxation, tracing its evolution across the BEPS process, and exploring why it is re-emerging in current UN negotiations. The panel will unpack the major critiques and competing interpretations surrounding the term, while also engaging with arguments from those who seek to reinterpret it in ways that better reflect where real economic activity and social contributions occur. Ultimately, it will evaluate whether “value creation” has any merit as a foundation for constructing a commitment to the fair allocation of taxing rights under the UN tax convention.
Speakers
Dr.Lyla Latif, Director, Managing Partner at Lai’Latif & Co Advocates, Co-Founder at Committee on Fiscal Studies,Director at House of Fiscal Wisdom
Dr. Clair Quentin, Lecturer in Law at Loughborough University
Dr. Mathew Olusanya Gbonjubola, a fellow of the Institute of Chartered Accountants of Nigeria and a member of the Chartered Institute of Taxation of Nigeria. In the course of his tax career, he had extensive exposure in the international tax arena representing Nigeria on many international tax bodies.
Moderator
Florencia Lorenzo, Senior Researcher Advocate, Tax Justice Network.