Ivan Ozai (Queen’s University), Beyond Economic Allegiance, 75(4) University of Toronto L. J., 425 (2025)

This article argues that the principle of economic allegiance, long regarded as the normative foundation of international tax jurisdiction, has become insufficient in the face of recent global reforms that expand the concept of nexus and fragment taxing authority. Nexus once served as a constraint, delimiting the states entitled to tax. Yet, as recent reforms broaden the scope of both source and residence, nexus increasingly admits multiple overlapping claims, transforming tax jurisdiction into a form of shared authority. The challenge today is no longer merely whether a state has jurisdiction but how to allocate jurisdictional fragments among states. The economic allegiance principle excludes states with no claim but offers no guidance for allocation. This article contends that fairness—particularly inter-nation equity—must be reaffirmed as the central normative principle in this allocation step. It demonstrates how recent reforms fail to articulate coherent distributional standards and instead rely on arbitrary formulas and ordering rules that disproportionately benefit wealthier states. To avoid reproducing inequities, political compromises in international tax must begin from explicit distributional considerations before turning to technical design.