BRISTOL, ENGLAND, 12 August. - (ANA) - Almost every country stands to gain from the UN's commitment to switch from “pay-where-you-say” to “pay-where-you-play” on taxing multinational corporations.

 

With a UN Tax Convention in sight, the world now faces a decision that could fundamentally reshape corporate taxation. This study, co-published with Public Services International, shows the revenue gains come in at 500 billion dollars each year – and almost everyone stands to gain.

 

The decision concerns the drafting of the UN Framework Convention on International Tax Cooperation. A pivotal commitment, in Article 5 of the current negotiating text, has the potential to ensure that countries can exert taxing rights according to the location of economic activity. That is, each country could tax multinationals in proportion to their share of the global activity.

 

In practical terms, this would mean moving away from a 100-year-old “pay-where-you-say” approach to a “pay-where-you-play” approach. In technical terms, it would be a shift away from the transfer pricing system based on the “arm’s length principle” to unitary taxation with formulary apportionment.

 

This study presents the country-level revenue impacts of this change, modelling different scenarios for implementing the change. The study makes two innovative contributions to the literature: it demonstrates that resource rights must precede taxing rights and that sales need to be measured where customers are located rather than where they originate.

 

Use our online data explore to see how much tax each country would gain under ‘pay-where-you-play’, and tailor how taxing rights are apportioned under unitary tax to see different tax revenue impacts.   - (ANA) -

 

AB/ANA/12 August 2026 - - -