While the practice of shifting profits to lower tax liability is becoming better known, a growing worry is that the entitlement to loss compensation for businesses can possibly result in the commoditization of losses. This could occur as companies try to use or trade their losses to receive tax relief which they would not otherwise be entitled to under ordinary principles. Subject 1 considers the extent to which countries currently deny taxpayers the chance to offset losses that actually were incurred in economic terms – what, then, would a just and equitable middle ground look like?

Lawyers and law experts the world over would be familiar with the concept of good faith as a principle that underlies the efficient running of a legal system. Despite its importance, however, ‘good faith’ can be challenging to define – and it often is easier to understand specific concepts under its umbrella such as estoppel or legitimate expectation. But how does good faith factor into systems of domestic and international tax? Understanding this requires a comparison of the role and purpose of good faith in various domestic and international tax systems, as well as the assessment of whether its presence should be reinforced to establish harmony and certainty in legal outcomes across these systems; matters tackled with in Subject 2.