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NIGEL FEETHAM, Tax Arbitrage: The Trawling of the International Tax System (New Haven, CT: Yale University Press, 2010, vii, 191, $26).
Recently, I heard a conference speaker accuse policymakers of unfairly caricaturing corporations as ugly, greedy people who deserve to be taxed. Nigel Feetham's new book, Tax Arbitrage: The Trawling of the International Tax System, makes a similar claim. He defends legitimate tax planning behavior of corporations in a fundamentally tax-competitive world against the ''tax dodge'' or ''aggressive tax avoidance'' rhetoric that often accompanies multinational government efforts to discover and shut down cross-border tax shelters and enforce various nations' general anti-avoidance rules, or ''GAARs.''
Mr. Feetham, a partner at a Gibraltar law firm, delivers a justified message of respect for business. Yet, when it comes to tax planning, the reader who prioritizes a healthy economy is leftwith a desire to save business firms from themselves. It may well be legitimate to ''organise . . . affairs in the most tax-efficient manner.'' But it is less efficient for businesses to spend time on tax planning rather than on maximizing productive commerce.
Tax Arbitrage traces the increasing scrutiny given to the tax affairs of multinationals by various OECD member countries, using the primary example of foreign tax credit generator transactions. It credits the Joint International Tax Shelter Information Center, or JITSIC, a cooperative initially formed by the U.S., U.K., and Australia (which now also includes China, Japan, and South Korea) with discovering these transactions. Feetham suggests that the global bank crisis of 2008-2009 offered political cover for a harsh crackdown on such transactions and for a movement away from the view, earlier expressed by the OECD, that ''double-dip transactions are not necessarily aggressive.''
This book provides an unusually frank insider's view into the world of global corporate finance and tax planning. It would serve as a nice resource in an international tax, tax controversy, or...