Tax Competition and the Trend toward Territoriality
Reuven S. Avi-Yonah
University of Michigan Law School
December 18, 2012
U of Michigan Public Law Research Paper No. 297
Tax competition is with us to stay, and the drive toward territorial taxation of multinationals will continue. Ultimately, it makes sense to tax corporations on a source basis because corporate residence is not very meaningful. But if the correct reforms to CFC rules are undertaken together with enhanced transfer pricing enforcement (e.g., by combining the arm's length standard with formulary solutions, as I have suggested elsewhere), such trends are not necessarily harmful to maintaining a stable corporate tax base.
Number of Pages in PDF File: 3
Keywords: tax competition, territoriality
JEL Classification: H25, K34
Date posted: December 19, 2012 ; Last revised: January 7, 2013
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