This paper reviews issues and evidence concerning tax-motivated, cross-border commodity transactions. A distinction is drawn between ""arbitrage trades"" (driven by cross-country differences in tax rates) and ""tax not paid"" transactions (motivated by the opportunity to pay no tax at all on...

This paper shows that under imperfect competition the welfare effects of indirect tax harmonization may depend crucially on whether taxws are levied by the destination or the origin principle. In a standard model of imperfect competition, while harmonization always makes at least one country...