Study sees $500B tax boost as UN convention talks resume Monday

Countries around the world could collect $500 billion more in corporate tax each year from multinational corporations without raising tax rates, according to a new study released ahead of a pivotal round of United Nations tax convention negotiations set to begin Monday in New York.

The Study

The research, co-published by the Tax Justice Network and the global union federation Public Services International, models the revenue impact of replacing the century-old "pay-where-you-say" approach to corporate taxation with a "pay-where-you-play" system that taxes multinationals based on where they employ workers and sell goods and services, rather than where they declare profits on paper.taxjustice+1

Under the current system, established by the League of Nations, multinational corporations routinely shift profits into tax havens before declaring them. The proposed approach would render such maneuvers ineffective, since companies tend to employ few workers in tax havens and sell almost no goods or services there.taxjustice

The study finds that countries would collectively see a 24 percent increase in corporate tax revenue from multinationals. Low-income countries would see the most dramatic gains, with corporate tax collections from multinationals quintupling, while lower-middle-income countries would triple their take. High-income countries would see a 21 percent increase, bringing in at least $140 billion more per year.taxjustice

"Multinational corporations have been robbing countries of billions in corporate tax every year by running circles around a tax rule written before most households had electricity," said PSI General Secretary Daniel Bertossa.taxjustice

What's at Stake in New York

The Fifth Session of the Intergovernmental Negotiating Committee on the UN Framework Convention on International Tax Cooperation is scheduled to take place from August 3 to 13 at United Nations Headquarters in New York. It is considered the most crucial session yet, where most of the convention's details and text are expected to be firmed up, with a final vote on adoption scheduled for next year.ictd+3

The convention represents a shift in global tax governance away from the OECD, which critics say failed to deliver meaningful reform over two decades. The UN process has made the replacement of transfer pricing with unitary taxation a central commitment, enshrined in Article 5 of the current negotiating text.taxjustice

Regional Impacts

Among the most notable projected gains: India would collect $43 billion more annually, a 194 percent increase; Brazil $17 billion more; South Africa $8.9 billion more; and Nigeria $2.5 billion more, representing a 641 percent increase. The United States would gain at least $35.5 billion, a 12 percent increase.taxjustice

Apple ↗ 1.16% recorded profits of $112 billion in 2025 — 24 times what General Motors reported in 1929 in inflation-adjusted terms — illustrating how corporate profitability has outpaced the tax architecture designed to capture it, the study's authors argue.taxjustice

Alison Schultz, a research fellow at the Tax Justice Network and one of the study's authors, said the results show "the 'where' matters — our shops, offices and factories and the people working in them, where global profit is locally made, matter."taxjustice