Edited by Yariv Brauner and Miranda Stewart
Chapter 11: Geographical boundaries of tax jurisdiction, exclusive allocation of taxing powers in tax treaties and good tax governance in relations with developing countries
Despite the absence of international customary law in tax matters, the geographical boundaries of tax jurisdictions have reached common standards worldwide. Global income taxation in the country of residence (with some slight variations related to citizenship-based exercise of taxing rights involving in particular the United States) is generally accepted, thus justifying the right of a country to levy its taxes on income produced outside its territory whenever said income is derived by one of its residents (or, if applicable, citizens). General liability to tax on worldwide income is then combined with a more limited liability to tax in the country where income is sourced, giving rise to an exposure to international (juridical) double taxation. Relief for double taxation through exemption or credit removes (in full or part) or prevents the perceived negative effects of such phenomenon on cross-border income, but also alters the international conditions of neutrality and inter-nation equity. This chapter will not address those issues in a general way, but only from the perspective of ascertaining whether, to what extent and on what grounds the mechanisms of taxing jurisdiction should be reconsidered in relations with developing countries. The focus is here on income taxation and the analysis is carried out from a legal perspective, but also taking into account policy considerations, with a view to enhancing international tax justice and a fair allocation of taxing rights in relations with developing countries. In this context, previous (multidisciplinary) academic writing of the author constitutes the starting point of this chapter, even when its content is not reproduced hereby.
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