Transfer Price
JOHAN DEPREZ
International tax policy: recent changes and dynamics under globalization
Abstract: This paper examines recent developments in international tax law and policy as part of the general dynamic of globalization. Tax policy is becoming active in the current phase of globalization, which involves international coordination, harmonization, and standardization. Unilateral, bilateral, and multilateral actions and policies by tax authorities, as well as initiatives by international bodies and agencies, are all part of this. The Organization for Economic Cooperation and Development’s attack on harmful tax competition, harmonization of corporate income tax rates within the European Union, proliferation of transfer pricing rules, and the World Trade Organization’s rejection of the U.S. Foreign Sales Corporation tax regime are all part of the present dynamic. Key words: globalization, harmful tax competition, international tax, tax harmonization, tax policy, transfer pricing.
Globalization may be seen to encompass three phases. In the first phase, the focus is on the breaking down of traditional trade barriers. During the second phase, the focus shifts to deregulation and privatization. In the third phase, international coordination, harmonization, and standardization become important. This third phase partially reflects a reaction against negative free market outcomes and the redevelopment of activist economic policy. The present paper tries to understand recent developments in international tax law and policy from this perspective. Whereas tax policy has lagged well behind developments in other realms as globalization has progressed, tax policy is becoming active and interesting in the third phase of globalization. Unilateral, bilateral, and multilateral actions and
The author is an attorney and economist working with the International Tax Services Group, Deloitte & Touche LLP, Los Angeles, California. The views express in this paper are solely those of
International tax policy: recent changes and dynamics under globalization
Abstract: This paper examines recent developments in international tax law and policy as part of the general dynamic of globalization. Tax policy is becoming active in the current phase of globalization, which involves international coordination, harmonization, and standardization. Unilateral, bilateral, and multilateral actions and policies by tax authorities, as well as initiatives by international bodies and agencies, are all part of this. The Organization for Economic Cooperation and Development’s attack on harmful tax competition, harmonization of corporate income tax rates within the European Union, proliferation of transfer pricing rules, and the World Trade Organization’s rejection of the U.S. Foreign Sales Corporation tax regime are all part of the present dynamic. Key words: globalization, harmful tax competition, international tax, tax harmonization, tax policy, transfer pricing.
Globalization may be seen to encompass three phases. In the first phase, the focus is on the breaking down of traditional trade barriers. During the second phase, the focus shifts to deregulation and privatization. In the third phase, international coordination, harmonization, and standardization become important. This third phase partially reflects a reaction against negative free market outcomes and the redevelopment of activist economic policy. The present paper tries to understand recent developments in international tax law and policy from this perspective. Whereas tax policy has lagged well behind developments in other realms as globalization has progressed, tax policy is becoming active and interesting in the third phase of globalization. Unilateral, bilateral, and multilateral actions and
The author is an attorney and economist working with the International Tax Services Group, Deloitte & Touche LLP, Los Angeles, California. The views express in this paper are solely those of
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