This applies both to direct tax, where an individual or business should suffer tax once, and consumption taxes such as VAT, where input tax recovery should be available at each stage of the transaction chain and only the end user, in the form of a private individual, ultimately pays the tax.

In the case of direct taxes, an efficient and effective mechanism should be available in all countries to give relief to a business or individual that has already paid tax in another jurisdiction before subjecting that same income, in whole or in part, to taxation.

In practice, too many countries do not give sufficient priority to seeking to offer full relief for tax suffered in another jurisdiction. This aspect of the global fiscal regime is an additional cost burden on multinational businesses.

The ‘arm’s length’ principle, whereby tax authorities treat transactions between connected parties by reference to the amount of profit that would have arisen if the same transactions had been executed by unconnected parties, is a sensible and long-established convention which should be the basis of international tax affairs.

Sales tax regimes are meant to tax only the end user, but all too often governments place restrictions or long delays on full input tax recovery and this again imposes unfair costs on businesses. If full recovery is not facilitated, it is unjust to charge the full VAT rate on the end user and only reduces efficiency in the business environment.