The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
The internationalization of business activity has created significant pressures on national corporate tax systems. Rather than abandon the corporate tax field, this paper predicts that governments will develop arrangements to further globalize the corporate income tax. The paper assesses the merits and limitations of allocation methods for attributing income to different jurisdictions according to formulas measuring business activity. Such methods are being used as part of transfer pricing regimes and are likely to be enhanced over time. Whatever international arrangements develop in the future, there is a role for new institutions to improve cooperative discussions among governments.