The Single Tax Principle
Document Type
Article
Publication Date
2022
Abstract
The single tax principle (STP) is a theory of international taxation developed in the 1990s but with roots going back to the beginning of the international tax regime in the 1920s. The STP states that cross border income should be subject to full taxation - neither double taxation nor double non taxation. Full taxation is defined as the applicable national income tax rate for individuals and the average corporate tax rate of the major economies (about 25%) for corporations. This definition, in turn, derives from the Benefits Principle (BP) which states that individuals should be taxed primarily at their place of residence and corporations primarily at the source of business profits. The STP requires that if the primary taxing jurisdiction under the BP does not impose a sufficient level of tax to achieve full taxation, the other jurisdiction (source for individuals and residence for corporations) should apply additional taxes to ensure full taxation.
Recommended Citation
Avi-Yonah, Reuven S., "The Single Tax Principle" (2022). Public Law & Legal Theory Working Papers. 124.
https://repository.law.umich.edu/pub_law_archive/124