Full Taxation: The Single Tax Emperor's New Clothes

Abstract

It has recently been argued in the international tax literature that the OECD Base Erosion and Profit Shifting project (BEPS) reflects and effectuates full taxation, namely an international norm that would suggest that all of a company’s income should be taxed in places where it has real business activities, representing a modern approach to the single-taxation paradigm. This article builds upon the concept of full taxation and argues that although rhetorically attractive, the concept is still conceptually inconsistent, particularly because it is incapable of providing any hints as regards where and who should finally be taxed. Moreover, it adopts an overinclusive and instrumental approach, the purpose of which appears to be only to legitimatise the use of coordinated provisions whose rationale attend exclusively to avoid the complete absence of taxation in cross-border transactions. This approach, innocuous at first sight, suggests however the unprincipled purpose of taxation just for the sake of taxation, putting at risk countries wishing to attract real economic activities and stigmatising the outcome of double non-taxation in a permanent way.