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Roin, Julie A. --- "The economic underpinnings of international taxation" [2007] ELECD 99; in Guzman, T. Andrew; Sykes, O. Alan (eds), "Research Handbook in International Economic Law" (Edward Elgar Publishing, 2007)

Book Title: Research Handbook in International Economic Law

Editor(s): Guzman, T. Andrew; Sykes, O. Alan

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843766742

Section: Chapter 8

Section Title: The economic underpinnings of international taxation

Author(s): Roin, Julie A.

Number of pages: 56

Extract:

8. The economic underpinnings of
international taxation
Julie A. Roin*



The term `international taxation' is an oxymoron. There is no such thing as
`international taxation' because no international governmental organization
has the power to levy a tax. Rather, the term refers to the uneasy interface
between national tax rules and transnational taxpayers, transnational transac-
tions and the income earned through such transnational transactions. This
interface, a creature sometimes of national statutory law and sometimes of
bilateral or multilateral treaties, attempts to answer the two vexing questions
that arise in this area: how much total tax should be paid on the income gener-
ated by transnational transactions and to which government(s) should such
payments be made? The answers governments provide to these questions
affect not only the amount of revenue collected by affected governments but
often the scope and direction of transnational investment activity.
This chapter tries to explain how and why various national governments
have chosen to answer these questions in the income tax context. Section I lays
out the economic stakes for both taxpayers and countries in devising an
answer. Section II explains one of the problems governments face in this area,
the problem of double taxation, and how attempts to solve that problem often
lead to the converse problem of undertaxation of transnational income. Section
III explores additional sources of undertaxation, both those stemming from the
inevitable variety in national tax systems and those attributable to difficulties
in attaching values in intercompany transactions. It also evaluates some ...