Oxford Review of Economic Policy volume 24, issue 4, P698-719 2008 DOI: 10.1093/oxrep/grn036 View full text
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M. P. Devereux

Abstract: This paper reviews economic principles for optimality of the taxation of international profit, from both a global and national perspective. It argues that for traditional systems based on the residence of the investor or the source of the income, nothing less than full harmonisation across countries can achieve global optimality. The conditions for national optimality are more difficult to identify, but are most likely to imply source-based taxation. However, source-based taxation requires an allocation of the…

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