The Quest for a Delicate Balance: short presentation delivered at the Round table "How Source and Residence have developed. Rethinking the principles of International Income taxation".

1. The Quest for a Delicate Balance
Marco Greggi
University of Ferrara
11 May 2018

2. Making Sense of a Paradox
Territoriality (and Residence) defined by Borders;
Paradox: Rise of the borders in the age of Globalization;
The more mobility intensifies, the more borders are used to
define (and regulate) it;
Limology is the study of the borders, as they occasionally
overlap.
Different perspectives: Social, Economical, Legal ... and
Fiscal.
Goal of this Input Statement
Borders help addressing the ongoing conflict between Source and
Residence in Tax Law. ”This time is different” (Reinhard - Rogoff)
no more.

3. A Bit of History
Source vs Residence before Taxation ...
Centrality of the power to tax: Roncaglia’s Diet 1158
(Constitutio de Regalibus);
Cuius Regio Ejus Religio (Whose Realm, its Religion):
Westphalia, 1648, and Augsburg 1555;
Cuius Regio, Ejus Tributum;
My Understanding
The rise of the Nation-State in Europe made possible by the
departure from an universalistic paradigm and determined the
primacy of the source principle.

4. A Matter of Logic
Sovereignty entails the (legitimate) power to tax;
Sovereignty (and the Power to tax) is exercised legitimately
only within the territory of the state;
C. Schmitt’s Nomos der Erde (1950): International taxation
as an instrument settling disputes between states;
In Common law Countries: Revenue Rule and Principle of
non-collaboration. Maryland v Turner Supreme Court, New
York Special Term Dec 1, 1911, 75 Misc. 9 (N.Y. Misc. 1911)
”... is a principle universally recognized, that the revenue laws
of one country have no force in another”.
My Understanding
Attraction of taxable bases beyond Borders not entirely consistent
with this approach and with the development of modern history in
Europe.

5. Living (yet) in the Age of Convergence ?
Taxation beyond the borders:
European Union Law (CC(C)TB) (...);
Human Rights Doctrine;
Base Erosion and Profit Shifting’s Multi-lateral Instrument;
The strange case for the Exchange of information (from
Source to Residence);
My Understanding
Several attempts to overtake the Cuius Regio Ejus Tributum
paradigm.

6. Time for Conclusion
A New Fiscal Middle Age ?
Need for Coherence to address challenges ahead (Digital
Taxation);
From Source and Residence, (back to) to Economic
Allegiance.
My Understanding
Source and Residence have developed ... going backwards !

7. Thanks for your Attention
marco.greggi@unife.it