The International Tax Regime: A Centennial Reconsideration

7 Pages Posted: 25 Jun 2015 Last revised: 21 Jul 2015

Multiple version iconThere are 2 versions of this paper

Date Written: June 25, 2015

Abstract

The international tax regime is almost a hundred years old. The two principles it is based on (the benefits principle and the single tax principle) were developed in the 1920s and 1930s. The regime functioned reasonable well until the 1980s, where globalization led to tax competition that undermined its principles. As the OECD is reconsidering the regime in the context of the BEPS and MAATM projects, now is a good time to rethink the fundamentals. Upon reconsideration, it is clear that the regime cannot function without multilateral consensus, and that such consensus is easier to achieve among source countries in the case of passive income and residence countries in the case of active income. This, in turn, suggests that the priorities underlying the benefits principle need to be reversed.

Keywords: international tax regime, BEPS, MAATM

JEL Classification: H26

Suggested Citation

Avi-Yonah, Reuven S., The International Tax Regime: A Centennial Reconsideration (June 25, 2015). U of Michigan Public Law Research Paper No. 462. Available at SSRN: https://ssrn.com/abstract=2622883 or http://dx.doi.org/10.2139/ssrn.2622883

Reuven S. Avi-Yonah (Contact Author)

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States
734-647-4033 (Phone)

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