International Tax Arbitrage : A Frozen Debate Thaws

Sovereign democratic nations make tax laws that reflect the needs and preferences of their citizens. This straightforward proposition suggests that tax laws may differ from country to country, and they do. Taxpayers may exploit some of these differences to their advantage. Over the past generation, global trade and cross-border investment boomed, and it also got easier to take advantage of tax law differences between nations. This combination — less friction and more opportunity — means that the exploitation of these differences played a growing role in tax planning. This is international tax arbitrage