Corporate Taxation—A Comparative Study
| Author | Geoffrey Hornsey |
| DOI | http://doi.org/10.1111/j.1468-2230.1953.tb02763.x |
| Date | 01 January 1953 |
| Published date | 01 January 1953 |
CORPORATE TAXATION-A COMPARATIVE
STUDY
IN
the field of taxation, as elsewhere, many problems have resulted
from the use of the corporate form.
If,
as a general rule, com-
panies are formed in order to make profits for their shareholders,
it
might prima facie seem sufEcient that those profits should
be
taxed when they reach the shareholders’ hands. But such a simple
solution
is
invariably rejected, and for several reasons. In. the first
place, its adoption would present widely varied opportunities for
t+
avoidance to those in control of companies. Secondly, revenue
authorities dislike, apparently, the wait until such profits reach the
shareholder, especially when they realise that taxation
‘‘
at source
may
be
an addition, rather than an alternative, to taxation of the
shareholder. The cherry is, after all, big enough to survive two
bites
!
Ahd
it
must be admitted that the rev6nue authorities find,
in
this connection, ample justification for their viewpoint in the
concept of legal personality.
If
it
be
conceded that companies,
as
such, must
be
taxed, the
next
step is
to
devise:
the best method of
80
doing. This might
appear simple, @nd, as an American
writer
has pointed out,’ a
suitable technique could probably be worked out
if
only the
relationships between companies and their shareholders were every-
where uniform.
It
is, in fact, far from simple to devise an optimum
metbod even within the range of, say, English public companies,
a
range which is narrow when compared with that in the United
States between the
I‘
incorporated pocketbook
”
(a
“
one-man
”
holding
or
investment company) and the giant industrial mrpora-
tions. Nor is this the whole of the Wculty, for there is an equal
lack of uniformity in the relationship between individual companies
and the economy as a whole. This would make
it
difacult
to
employ any simple, general method of corporate taxation as a
means of fostering economic development. In these circumstances,
therefore,
it
is only to
be
expected that the various legal provisions
relating to corporate taxation should be both detailed and compli-
cated.
It
is proposed to examine in the present study the laws
of
France, the United States and the United Kingdom, twconsider the
manner
in
which these systems have solved the problems posed by
the above-mentioned factors.
1
R.
Blough:
‘I
Problems of Corporate Taxation in Time
of
War,”
in
10
Law
and
Contempcyry
Probleys
(1943)
108,
at p.
110.
Another valuable theoretical
study of the
of
corporate taxation
is
to be found in Capitaine:
‘‘
Le
statut des soci6tks holdings en Suisse,” in
Actea de
la
socikU
suisse
des
juristes, 1943,
pp.
199-162.
mechanics
26
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