In this article, the author reviews major legislative, economic and societal trends that have affected cross-border tax planning over the past twenty years. Income tax rate changes, interest rate trends and technological advancements are considered. The decrease of corporate income tax rates and their convergence among jurisdictions, along with the reduction of interest rates have reduced the absolute economic benefit of traditional cross-border financing. Given that these trends constrain the opportunities for tax arbitrage, it is curious that tax administrations continue to focus on transfer pricing. The burgeoning of readily available information is another important development that has given taxpayers and their advisers improved access to the positions of taxation authorities.
These authorities are now requesting more information with respect to taxpayers' aggressive tax positions and dispute mitigation likely will constitute a growing proportion of the international tax practitioner's workload.