This study compared the destination principle and origin principle by simulation. Most studies have concluded that destination taxation is preferred because it does not distort production. Some studies have concluded both taxations are equivalent. I used simulation to compare the impacts of destination taxation and the impacts of origin taxation. My simulation shows the following. First, destination taxation distorts production, and makes producers in low-tax countries better off and producers in high-tax countries worse off. Second, origin taxation distorts consumption, and makes consumers in low-tax countries better off and consumers in high-tax countries worse off. Third, the total effective tax rate on cross-border transaction is likely to be somewhere between the rates implied by the destination principle and origin principle.