Taxation Implications of Global Trading: A Summary

In this Article, the author analyzes global trading by financial intermediaries of stocks, securities, and other products. To focus the analysis, the author describes typical organizational and locational patterns and points out the high degree of international functional integration common in this activity. The Article next discusses the current tax rules applicable to global trading. The author focuses on the Organization for Economic Cooperation and Development model income tax treaty and the Internal Revenue Code rules that govern the apportionment among jurisdictions of the profits of this activity.

The author concludes that global trading challenges many fundamental economic assumptions upon which these rules rest, among them the integrity of distinct legal entities and the relevance of national boundaries to capital markets.