IMF Working Papers

Cash-Flow Tax

By Christian Schutte, Parthasarathi Shome

January 1, 1993

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Christian Schutte, and Parthasarathi Shome. Cash-Flow Tax, (USA: International Monetary Fund, 1993) accessed November 12, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The cash-flow tax has been proposed as an alternative to corporate income tax on grounds of clarity and simplicity in defining the tax base in the face of widespread departures from the comprehensive income tax in actual practice. Variants of the tax, with their advantages and disadvantages, demonstrate that it would require careful design. Simplicity is not an obvious property because of expectable administration problems related to tax avoidance and evasion through transfer pricing; to inflation adjustments; and to incompatibility with existing international tax regimes. Thus, the tax remains theoretically attractive but difficult to implement by a single--especially developing--country.

Subject: Cash-flow tax, Corporate income tax, Income and capital gains taxes, Income tax systems, Tax allowances, Taxes

Keywords: Cash flow, Cash-flow tax, CCFT country, CCFT host country, Corporate cash-flow tax, Corporate income tax, Firm, Foreign tax credit, Global, Host-country tax competition, Income and capital gains taxes, Income tax systems, Rate of return, Repatriation tax, Revenue, Shareholder--base CCFT, Tax, Tax allowances, Tax authorities, Tax competition, Tax deductibility, Tax profile, WP

Publication Details

  • Pages:

    30

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 1993/002

  • Stock No:

    WPIEA0021993

  • ISBN:

    9781451841688

  • ISSN:

    1018-5941

Notes

Also published in Staff Papers, Vol. 40, No. 3, September 1993.

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