The question whether countries should tax corporations on their income is an old one, yet it has never been more topical than it is today. Tax competition is driving down corporate tax rates in a race to the bottom, and 12 countries today levy no corporate income tax at all. The pressure from tax competition and the major complications that arise in administrating and enforcing current corporate income tax systems are so vast that one may wonder whether it is worth dealing with them or whether it would not be much easier simply to give up on taxing corporate income, replacing lost revenues with other taxes.

Why Reform Is Needed and How It Could Be Designed