The paper discusses the main arugments for destination-versus-origin-based commodity taxation in the European Community's Internal Market. Destination-based solutions necessarily distort commodity trade in the Community because final consumer purchases can only be taxed in the origin country. On...

The abolition of internal border controls in the European Union (EU) creates new opportunities of tax arbitrage for rational economic agents. Cross-border shopping and trade deflection become important sources of tax avoidance when tax rates differ across countries. The paper identifies...