Under the tax treaty framework, the taxing rights of income from international transportation is allocated exclusively to the country of residence or country of the place of effective management. The basis of such a tax policy is stated to be administrative inconvenience in allocating income over jurisdictions. However, this long-standing policy is questionable on several grounds in light of its fundamental inconsistency. Furthermore, tax treaty rules often influence domestic tax systems leading to tax competition amongst countries to attract businesses and, therefore, would undermine the international tax system, also creating opportunities for tax avoidance. It should also be considered that, in an analogous situation in the case of digitalized businesses, the debate on Pillar One shows that, at least theoretically, a solution for the allocation of global income to various market countries can be envisaged. Against this backdrop, this study re-examines the present policy and tax treaty framework regarding income from international transportation and provides a more consistent solution that would usher in tax certainty without creating opportunities for tax avoidance.