Paul L. Caron

Thursday, November 4, 2021

Crane Reviews Mason's The 2021 BEPS Compromise

Charlotte Crane (Northwestern; Google Scholar), Change in International Tax (JOTWELL) (reviewing Ruth Mason (Virginia; Google Scholar), The 2021 Compromise, 172 Tax Notes Fed. 569 (2021)):

Jotwell (2019)Only a fraction of tax law professors teach the course usually called “international tax.” For the rest of us teaching tax at a law school, the effort that technical competency in international tax requires is unsustainable, especially given the instability of that part of the law that most affects US multinational business. But every tax professor should understand at least a little bit about the ways that international tax law is changing. I recommend reading Ruth Mason’s work, most recently The 2021 Compromise, as a great way to gain competency regarding this evolution.

Mason’s goal in this piece is to contextualize recent developments in the OECD/G20’s BEPS project against the backdrop of her extensive prior work on the subject (see especially The Transformation of International Tax), and to put into perspective the changes currently underway in the international tax space. On July 1, 2021, 130 countries reached agreement in principle to Pillars 1 and 2 of the G20/OECD Base Erosion and Profits Shifting (BEPS) project. Pillar 1 concerns the allocation of taxing authority after the emergence of the digital economy and Pillar 2 is a proposal for a global minimum tax. This two-Pillar OECD project represents a second phase of the G20/OECD work on BEPS.

In sum, Mason’s new article, paired with her prior work on the subject, will be valuable to those of us teaching tax in law schools who have a vague sense of the way the old regime was supposed to work, but have not paid much attention either to the ways in which the old regime has failed on its own terms, or to the ways in which it falls short of the needs of an increasingly globalized economy. Those who read Mason’s work to understand the political economy behind the introduction of these changes will find the effort well spent.

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