The OECD seeks to align transfer pricing and profit taxation with value creation. This article argues that taking this objective seriously requires profit splitting. This is shown by applying Shapley value theory to the problem of allocating a firm’s profit tax base to the jurisdictions in which the firm is active. The application of cooperative game theory is justified with the argument that interjurisdictional cooperation on legal issues is a necessary condition for firms earning profit abroad. The profit tax base should therefore be allocated to jurisdictions according to standards generally considered as equitable when distributing the gains of cooperation. At least, this should be the primary objective, which finds its limitations only in the consideration of information and efficiency-related costs. This insight provides the basis for arguing for a two-step approach to profit taxation that has similarities to residual profit allocation but is conceptually and practically different.