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Money on the Table?: Responding to Cross-Border Tax Arbitrage

24 Pages Posted: 25 Nov 2002  

Daniel Shaviro

New York University School of Law


Transactions commonly known as "cross-border tax arbitrages" take advantage of inconsistencies between countries' tax rules to achieve more favorable tax results than could have been achieved by investing just in one country. Examples include "dual resident companies" and "double dip leases," in which clever structuring may enable a multinational enterprise to claim the same deduction in two countries. This article analyzes the national and worldwide welfare considerations that may be relevant to a country's deciding whether to allow tax benefits that will be thus duplicated, taking into account strategic interactions with other countries. It also briefly discusses cross-border tax arbitrage in relation to tax harmonization and the proposed creation of multilateral tax institutions akin to the GATT and WTO.

Keywords: international taxation, tax policy, globalization, tax competition, tax harmonization

JEL Classification: H20, H25, H87

Suggested Citation

Shaviro, Daniel, Money on the Table?: Responding to Cross-Border Tax Arbitrage. Chicago Journal of International Law, Fall 2002. Available at SSRN: or

Daniel Shaviro (Contact Author)

New York University School of Law ( email )

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