As a result of the globalization of economic activity, international tax issues have become an increasingly important consideration not only for foreign investors, but also for governments in designing their tax systems. This is especially the case for the resources sector where many firms operating in that sector, particularly in developing countries, are likely to be foreign multinational firms. While a country’s domestic resource tax regime is obviously important, the effects of that regime and its attractiveness to investors can be enhanced or undermined by the tax rules applying to international transactions. Therefore, governments need to consider international tax issues in tax policy design to ensure the resource tax regime is competitive and attractive to foreign investors, and at the same time, will ensure that the state, as resource owner, receives the intended share of the economic rents from the natural resources. This latter objective includes ensuring the revenue is not unnecessarily eroded through aggressive tax planning.1
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