蓝莓视频

It shouldn鈥檛 come as any surprise that many of the world鈥檚 largest multinational corporations shop around from country to country for the best deal they can get on taxes.

Professor Ken Klassen, School of Accounting and Finance, University of 蓝莓视频

鈥淭here鈥檚 pretty strong evidence that鈥檚 true,鈥� says Ken Klassen, a professor in the School of Accounting and Finance.听 He adds that, among corporations, 鈥渢he tendency is to engage in income shifting; the moving of profits to where the tax regime allows a company to be more profitable.鈥�

It鈥檚 all perfectly legal. The larger question could be: Why don鈥檛 all corporations do it?

鈥淭here are companies that feel they have an obligation to pay their share of taxes in each country,鈥� says Klassen, who is also a director of the Deloitte Centre for Tax Education and Research and the Robert Harding Research Leadership Fellow. 鈥淧art of what we鈥檙e trying to understand is what drives differences across companies. That鈥檚 the big challenge.鈥�

Publicly traded corporations are wedged between shareholder demands for profit, and the public relations virtue of being seen as a good corporate citizen, he says.

Then there鈥檚 the issue of intellectual property. How and where should that be taxed?

Klassen earned his BA and MAcc at 蓝莓视频 then moved on to Stanford University, where he studied under renowned accounting and finance expert Mark Wolfson, to complete an MS in statistics and his PhD in accounting. His academic mission is a fuller understanding of how strongly companies respond to tax incentives.

Corporate tax rates have been reduced throughout the developed world in recent years. The United States has been the most stubborn in reducing those rates, says Klassen, while in Germany the tax rates have plunged. In Canada we have allowed the corporate tax scale to dip slowly downward.

鈥淐anada has dropped its tax rate and that鈥檚 had some positive impact on retaining investment,鈥� he says. 鈥淭he U.S. has struggled.

鈥淵ou can put up fences, but there have to be gates in those fences. This is a global economy,鈥� says Klassen.听 鈥淐anada should continue to follow the general global trend. It has no choice.鈥�