Paul L. Caron
Dean




Thursday, September 16, 2021

Avi-Yonah: The International Tax Regime At 100 — Reflections On The OECD's BEPS Project

Reuven Avi-Yonah (Michigan; Google Scholar), The International Tax Regime at 100: Reflections on the OECD's BEPS Project:

This essay will consider the outcome of Pillars One and Two in light of the history of international taxation since the foundation of the international tax regime in 1923. Specifically, it will consider how Pillar One fits with efforts to redefine the source of active income in light of the digital revolution, and the ways in which Pillar Two implements the single tax principle, which can be traced back to the first model treaty from 1927. Both of those ideas were already articulated and developed in my own early writing on international taxation from the 1990s, when the Internet was in its infancy.

1. The Two Pillars of BEPS 2.0: Evolution or Revolution?

In L’ancien Regime et la Revolution (1856) Alexis de Tocqueville argued that the major innovations of the French revolution were prefigured in developments during the old regime, so that the revolution was less of a sharp dividing line than previously thought. This essay in honor of the 75th anniversary of the IBFD will make a similar argument for the current revolution in international taxation contained in the two pillars of BEPS 2.0. Specifically, I will argue that Pillar One derives from efforts to redefine the source of active income in light of the digital revolution, which build on US state taxation use of sales factors since 1911 as a source of corporate income, while Pillar Two implements the single tax principle, which can be traced back to the first model treaty from 1927. Both of those ideas were already articulated and developed in my own early writing on international taxation from the 1990s, when the Internet was in its infancy.

https://taxprof.typepad.com/taxprof_blog/2021/09/the-international-tax-regime-at-100-reflections-on-the-oecds-beps-project.html

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