International taxation and corporate strategy: evidence from British overseas business, circa 1900–1965

Abstract

In this article we establish the impact and importance of international taxation on British overseas business circa 1900 to 1965. As the levels of national taxation rose across the twentieth century, different states began to compete for taxable income. This created international double taxation whereby taxation was due twice on the same income or profit. We examine the difficulties that this caused and the responses of firms to this challenge, through the adoption of tax-minimisation strategies, alterations to corporate structure, and the relocation of corporate domicile. We discuss how international taxation was one of the secular changes in the international business environment that contributed to the rise of large-scale multinational enterprises. We conclude by making a call for greater consideration of international taxation in international business history.