The Benefits Principle

3 Pages Posted: 15 Jun 2022 Last revised: 28 Jul 2022

Date Written: June 2, 2022


The benefits principle (BP) is a concept of tax law which states that active (business) income should be taxed primarily in the source country while passive (investment) income should be taxed primarily in the country of residence.

Keywords: Benefits principle

JEL Classification: H26

Suggested Citation

Avi-Yonah, Reuven S., The Benefits Principle (June 2, 2022). U of Michigan Public Law Research Paper No. 22-027, Available at SSRN: or

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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