Of counsel Paul Oosterhuis discusses what taxes the multinational tax community should agree are properly imposed as income taxes and what taxes other countries should defer to, either through foreign tax credits or income exemptions. Mr. Oosterhuis sets forth two fundamental principles that guide his thinking on how to measure and allocate specific types of cross-border income:
- Net income taxes are economically different than, and should be distinguished from, taxes on revenues.
- While it should be insisted upon that income taxes only include taxes on net income, there should be flexibility on the level at which net income is measured and how it is allocated among taxing jurisdictions.