What is wrong with the international business tax system?

Abstract Despite wave after wave of reform, the existing international business tax system remains poor. This article evaluates the system against five standard evaluative criteria: economic efficiency, robustness to profit shifting, fairness, ease of administration, and incentive compatibility, and concludes that it performs poorly on all five. The article argues that the root cause of this poor performance is the underlying fundamental structure of the system, in particular its origin basis and the separate entity approach.