Jurisdictions
Regions
Industry Sectors
01/04/20
From Features
Market Focus: USA
The International Tax Ping Pong
From Competition to Coordination and Back
Aparna Mathur
Senior Research Manager in Economics, Amazon
There is something new brewing on the international tax landscape. Historically, countries competed with one another by offering lower corporate tax rates and other incentives in the hope of attracting companies to locate investment, reported profits, and jobs within their borders.
Now, an attempt is being made to restrain this tax competition via regulations that would allow countries to extract a growing share of companies’ worldwide profits. With this shift, a central question of international taxation appears to be how big each jurisdiction’s slice of the pie of profits should be. And relatedly, how do we set up rules to ensure that there is international consensus on how this pie is divided? These are tough questions, and ones that I suspect countries will be debating for the next decade.
Latest Articles
US Tax Reform, Simplification, and FATCA
“The Force Is Strong, Young Skywalker.”
Professor William Byrnes
Texas A & M University School of Law
On the first day of Federal Income Taxation class, my law students read this phrase, written in large letters upon the whiteboard: “The Force is Complex, Opaque, Uncertain, and Changing”. I exclaim, “For the students in the room serious about becoming tax lawyers, repeat this phrase as a mantra before class. And then continue repeating it throughout your life each day before work.”
Hoping the millennials understands my Star Wars reference, I continue, “The Force will take care of you with high salaried private firm and corporate employment as well as employment in a government position, or a policy thinktank, and even as an academic.” Inevitably a student brings up tax simplification to which I respond, “Young Skywalker,” “once a Jedi, always a Jedi.” Elaborating, I explain, “Legislation and regulations are written by Jedi, known as tax staffers and Treasury counsel, who have become one with the Force and the Force is strong.”
