The article examines how removing restrictions on moving money between countries can impact corporate tax rates. By analyzing data from 21 OECD countries between 1983-99, the study shows that when a country eases its exchange controls, it tends to lower its corporate tax rates. This change also leads to more competition between countries in setting tax rates. The effect is stronger for high-tax countries and for statutory or average tax rates. Additionally, when other countries liberalize their exchange controls, it can influence a country to lower its own tax rates.