University of Michigan Legal Working Paper Series
University of Michigan John M. Olin Center for Law & Economics Working Paper Series
Tax Competition, Tax Arbitrage, and the Internation Tax Regime
Abstract
This paper argues that a coherent international tax regime exists, embodied in both the tax treaty network and in domestic laws, and that it forms a significant part of international law (both treaty-based and customary). The practical implication is that countries are not free to adopt any international tax rules they please, but rather operate in the context of the regime, which changes in the same ways international law changes over time. Thus, unilateral action is possible, but is also restricted, and countries are generally reluctant to take unilateral actions that violate the basic norms that underlie the regime. Those norms are the single tax principle (i.e., that income should be taxed once- not more and not less) and the benefits principle (i.e., that active business income should be taxed primarily at source, and passive investment income primarily at residence).
Subject Area
Taxation-Transnational
Recommended Citation
Reuven S. Avi-Yonah,
"Tax Competition, Tax Arbitrage, and the Internation Tax Regime"
(January 2007).
University of Michigan Legal Working Paper Series.
University of Michigan John M. Olin Center for Law & Economics Working Paper Series.
Working Paper 67.
http://law.bepress.com/umichlwps/olin/art67
No readers' reactions have been posted for this article. To submit one, copy the URL for this article (http://law.bepress.com/umichlwps/olin/art67) and click here.