Emory Law Journal


Customary international law recognizes that every country has the right to impose both source-based taxation on income earned within its borders by foreign persons and residence-based taxation on the worldwide income of its own residents. Thus, so far as international law is concerned, the legitimacy of these taxing rights is fully accepted, and neither of these forms of taxation represents overreaching by governments. Nevertheless, unless ameliorative steps are taken, their full exercise may produce double taxation of international income. This is because, in the absence of mitigation, international income could be subject to source-based taxation in the country where it arises and to residence-based taxation in the country where the earner is a resident. The resulting tax burden would be a material impediment to international commerce.