Subsidiary A (in state with high corp tax) pays millions in "consulting fees" to same MNC's subsidiary B (in state with no corp tax), but the actual value of the consulting B delivers to A is negligible. Legal? Perhaps. But why are you so opposed to calling it "illicit"? Thanks!https://twitter.com/MForstater/status/1022821492017557504 …
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Thanks for asking. The distinctions are a bit subtle for twitter, but I will try: (1) Your scenario doesn't sound legal or normal for big corps - it could be illicit (2) What big corps do in terms of BEPS is not this (3) What the indicator picks up is neither 1 or 2....<more..>
@ThomasPogge does that make sense? Does it lead you to reexamine assumptions about what does or doesn't fall under definition of illicit?
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I am thinking about how it makes sense to use this language, Maya, and very grateful for your help and also for the other responses my question has elicited. I hope we can work toward a clear, useful definition that's responsive to the real-world phenomena.
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You are welcome -- it is important I think that the concepts/definitions, real life case examples and numbers/estimates line up in a way that is recognisable to all concerned -- otherwise there is a danger that the words and numbers mean everything and nothing.
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