Wednesday, October 11, 2017
Arthur Cockfield (Queen's) presents What's International Tax Law Got to do With It? at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:
The OECD and G20 Base Erosion and Profits (BEPS) project represents the greatest multilateral cooperative effort to date to inhibit aggressive international tax planning and offshore tax evasion. While accepting that cooperation is normally helpful, the Article explores some of the theoretical and practical limits to international tax cooperation along with the potential for unilateral tax reform to confront pressing challenges.
First, the value of competition versus cooperation remains contested by economists and others. Second, multilateralism may distract governments from focusing on unilateral reform efforts that are better suited to tackling contemporary policy challenges. Third, it remains unclear whether cooperative solutions are curtailing perceived problems in any significant sense. Finally, global political developments, including anti-globalization, nationalism, nativism and the rise of the BRICs make progress through international cooperation even more elusive. Accordingly, in times where political developments reduce opportunities for meaningful cooperation then governments need to focus on unilateral reforms to their international tax laws and policies. To pursue optimal policy, governments should consider eliminating tax subsidies for global operations, limiting expense deductions to zero-tax jurisdictions, and ensuring that the human beneficial owners of business and legal entities can be identified for tax and law enforcement purposes.