Recent developments - including greater taxpayer sophistication in structuring and locating international financing arrangements, increased government concerns with the role of debt in complicated tax avoidance techniques, and disruption by decisions of the European Court of Justice of Member States' regimes limiting interest deductions - have stimulated new laws and policy controversies concerning the international tax treatment of interest expenses. The question of the proper treatment of interest expenses has generally been looked at from the perspective of either inbound or outbound investment and with the view that nations are either debtors or creditors, not both. As a result, the issues of residence countries' limitations on interest deductions on borrowing to finance tax-favoured foreign-source income, on the one hand, and of source countries' restrictions on interest deductions intended to limit companies' ability to strip income from a higher-tax to a lower-tax country, on the other, have generally been treated as separate issues, with no real effort to show how they relate. This article demonstrates their linkage and proposes a multilateral solution that would address both of these problems.