Corporate tax in an international environment - Problems and possible remedies

This paper addresses the problems of corporate taxation in a globalized world. It first illustrates recent trends in international practices and then reviews the literature on the effects of corporate taxes in closed and open economies. The paper emphasizes the severity of the problems caused by current international tax rules. It compares various national and international policy proposals and considers two recent Nordic tax reform proposals as examples of national-level solutions. The problems of current international corporate taxation are fundamental. Introducing increasingly tight anti-avoidance measures could serve as a medium term approach but does not provide any promising long-term solution. There should be more research concerning initiatives that would reform the fundamental principles of the international tax system.