Monday, February 20, 2023
Global Tax Reform And Mythical International Law
Tarcísio Diniz Magalhães (Antwerp; Google Scholar) & Allison Christians (McGill; Google Scholar), Global Tax Reform and Mythical International Law:
Over the past several years, governments around the world have been debating how to design coordinated minimum taxes on large multinationals in a bid to end race-to-the-bottom global tax competition. The plans so far have been complex and intricate, but in virtually all respects the evolution of ideas has followed well-worn practices and approaches in tax and corporate law. Nevertheless, outspoken critics have emerged with arguments against change that are grounded in abstract and often ill-defined international law concepts—effectively, a mythology of general and/or customary norms meant to forestall forward momentum and cast doubt on the fundamental workability of global tax reform as it has been collaboratively developed to date. This Article examines the myths of international tax law and demonstrates that each purported impediment is either conceptually under-theorized or exaggerated in legal impact or both.
While noting that the minimum tax initiative as it has progressed is flawed, the Article argues that the mythical international law norms offered by critics do nothing toward achieving improvements but only seek to undermine the underlying goals of the initiative as a whole. To the extent curbing base erosion and profit shifting by the largest corporations would bring about a more stable and mutually acceptable world order, the use of mythological international law to forestall reform should be abandoned in favor of cooperative problem-solving.