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University of Michigan Law School

International tax

Tax Law

Law & Economics Working Papers

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Full-Text Articles in Law

Tax Harmony: The Promise And Pitfalls Of The Global Minimum Tax, Reuven S. Avi-Yonah, Young Ran (Christine) Kim May 2022

Tax Harmony: The Promise And Pitfalls Of The Global Minimum Tax, Reuven S. Avi-Yonah, Young Ran (Christine) Kim

Law & Economics Working Papers

The rise of globalization has become a double-edged sword for countries seeking to implement a beneficial tax policy. On one hand, there are increased opportunities for attracting foreign capital and the benefits that increased jobs and tax revenue brings to a society. However, there is also much more tax competition among countries to attract foreign capital and investment. As tax competition has grown, effective corporate tax rates have continued to be cut, creating a “race-to-the-bottom” issue.

In 2021, 137 countries forming the OECD/G20 Inclusive Framework on BEPS passed a major milestone in reforming international tax by successfully introducing the framework …


A New Framework For Digital Taxation, Reuven S. Avi-Yonah, Young Ran (Christine) Kim, Karen Sam Mar 2022

A New Framework For Digital Taxation, Reuven S. Avi-Yonah, Young Ran (Christine) Kim, Karen Sam

Law & Economics Working Papers

The international tax regime has wide implications for business, trade, and the international political economy. Under current law, multinational enterprises do not pay their fair share of taxes to market countries where profits are generated because market countries are only allowed to tax companies with a physical presence there. Digital companies, like Google and Amazon, can operate entirely online, thereby avoiding market country taxes. Multinationals can also exploit existing tax rules by shifting their profits to low-tax jurisdictions, thereby avoiding taxes in the residence country where their headquarters are located.

Recently, a global tax deal was reached to tackle these …


The Elephant Always Forgets: Us Tax Reform And The Wto, Reuven S. Avi-Yonah, Martin G. Vallespinos Jan 2018

The Elephant Always Forgets: Us Tax Reform And The Wto, Reuven S. Avi-Yonah, Martin G. Vallespinos

Law & Economics Working Papers

The “Tax Cuts and Jobs Act” (TCJA) enacted on December 22, 2017 includes several provisions that raise WTO compliance issues. At least one such provision, the Foreign-Derived Intangible Income (FDII) rule, is almost certain to draw a challenge in the WTO and is likely to lead to another US loss and resulting sanctions. This outcome would be another addition to the repeated losses suffered by the US for export subsidies from the 1970s to 2004, which led to the imposition of sanctions and the ultimate repeal of the offending regime. The important question for 2018 and beyond is whether the …