Ring Presents The Conflictual Core Of Global Tax Cooperation Today At Duke

Diane M. Ring (Boston College; Google Scholar) presents The Conflictual Core of Global Tax Cooperation (with Shu-Yi Oei (Duke; Google Scholar)) at Duke today as part of its Duke Tax Policy Seminar hosted by Larry Zelenak:

Conventional wisdom suggests that the world is in a transformative era of global tax cooperation, as evidenced by the launch of a sweeping multilateral tax reform project to confront tax base erosion and profit shifting (“BEPS”) spearheaded by the OECD and G20. This Article argues that this dominant cooperation-centric account of OECD/G20-based global tax reform is overstated and masks fundamental conflicts in how developing and developed countries evaluate these reforms.

This Article illuminates and decodes the conflictual core imbedded in the OECD/G20 tax reform project by analyzing developing countries’ criticisms of the project and by identifying their unifying drivers. We argue that, fundamentally, developing countries are intensely concerned about the wide historical gulf in resources and power between developing and developed countries (particularly the United States and the European Union), and how the OECD/G20 global tax reform fails to address, and may even exacerbate, that gulf. Meanwhile, OECD and developed country defenses of the global tax reform have largely missed this fundamental crux of developing country criticisms—as evinced by their focus on the project’s incremental short-term benefits for inter-developing country tax competition.

Discerning the deep conflicts at the heart of contemporary global tax reform has important implications for accurately describing the state of asserted global tax cooperation and for appreciating both its promise and its risks. For example, decoding the crux of the conflict helps explain the recent proposal by key developing countries to shift the location of global tax reform work to the United Nations, and also explains why this turn to the UN seems to have caught developed countries by surprise.