Assaf Harpaz

Date of Award

2022

Document Type

Dissertation - Closed Access

Degree Name

Doctor of Juridical Science (S.J.D.)

Institution

Duke University School of Law

Abstract

In 2021, the OECD proposed new rules for cross-border taxation of multinational corporations. The proposed rules follow several years of multilateral negotiation led by the OECD and drafted by a broader Inclusive Framework of over 140 countries. This reform will require unprecedented multilateral cooperation on international taxation between Inclusive Framework members, setting aside their conflicting economic interests. The goal of this Article is to highlight the importance of multilateral cooperation and illuminate the obstacles to implementing international tax reform. The Article argues that the new international tax framework requires extensive multilateral cooperation to reallocate taxing rights and limit profit shifting. But such ambitious cooperation might be more than countries can accomplish. The new rules are largely an outcome of political compromises rather than a principled approach to tax policy. They infringe on tax sovereignty, limit tax competition, and undermine the economic interests of the world’s developing countries.

The Article begins by outlining the OECD’s two-pillar approach for addressing the tax challenges of digitalization and profit shifting. It examines the OECD’s role in designing international tax rules and explores the obstacles to implementing the OECD’s reform. The Article then assesses the anticipated winners and losers from the reform and considers the new approach as a political compromise. It evaluates limitations on tax sovereignty and competition and reflects on the involvement of developing countries in the policymaking process

Comments

This article is submitted in partial fulfillment of the requirements for the degree of Doctor of Juridical Science (S.J.D.), Duke University School of Law, 2022.

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Library of Congress Subject Headings

Taxation

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