Allocative Justice as a Constraint on Fiscal Imperialism in International Tax

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Okanga Ogbu OkangaFollow
Kim Brooks, Dalhousie UniversityFollow

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Article

Abstract

Taxpayers’ cross-border activities often result in two (or more) states claiming the right to tax their income. To address concerns about how those tax liabilities might aggregate and suppress international activities, states typically agree to split the tax base between them. But how can states fairly share tax revenue from cross-border activities? Tax scholars and policymakers offer different normative perspectives to address this inter-nation equity conundrum. In this article, we conceptualize these normative perspectives into two types. One centres on identifying where the economic factors that lead to the ability to produce the income are located (and uses that determination as the basis for an equitable split of taxing rights). Accordingly, a state with a greater degree of economic connection should enjoy a greater share of taxing rights. This perspective, we contend, is distinguishable from the infusion of cosmopolitan distributive justice theory into tax law. The latter approach portrays the redistribution or transfer of tax revenue, a form of tax aid from high-income countries to low-income countries, usually with the goal of funding humanitarian or developmental spending. Perhaps due to ambiguities in the overarching inter-nation equity concept (which seemingly includes cosmopolitan distributive justice) existing tax policy scholarship often fails to adequately distinguish the two perspectives when articulating the justifications for international taxing rights (re)allocation involving low-income countries. This article demonstrates the policy imperatives for distinguishing the two perspectives. For textual and conceptual clarity, we frame the first perspective as “allocative justice” and the latter as “redistributive justice.” For low-income countries to escape the trap of fiscal imperialism it is essential that they (as well as international tax policymakers in all states) establish international tax regimes that align with allocative justice and resist tax bargains that unduly cede taxing rights to which they have a justifiable claim. Redistributive justice may also play a role in supporting or explaining tax sharing arrangements between countries, but that framework should not be conflated with allocative justice.

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Citation Information

Okanga, Okanga Ogbu and Brooks, Kim. "Allocative Justice as a Constraint on Fiscal Imperialism in International Tax." Osgoode Hall Law Journal 61.3 (2025) :
DOI: https://doi.org/10.60082/2817-5069.4069
https://digitalcommons.osgoode.yorku.ca/ohlj/vol61/iss3/5

References

1 Okanga Ogbu Okanga is an Ontario lawyer, tax law and policy researcher (ogbu.okanga@dal.ca); and Kim Brooks is a Professor of Law and President, Dalhousie University (kim.brooks@dal.ca).

2 For the characterization of international taxation as law, see Reuven S Avi-Yonah, “International Tax as International Law” (2004) 57 Tax L Rev 483, DOI: https://doi.org/10.2139/ssrn.516382 [Avi-Yonah, “International Tax”]; Allison Christians, “Hard Law, Soft Law, and International Taxation” (2007) 25 Wis Intl LJ 325; John Bentil, “Situating the International Tax System Within Public International Law” (2018) 49 Geo J Intl L 1219.

3 Michael J Graetz & Michael M O’Hear, “The “Original Intent” of U.S. International Taxation” (1997) 46 Duke LJ 1021, DOI: https://doi.org/10.2307/1372916; Avi-Yonah, “International Tax,” supra note 2. A few countries—the United States and Eritrea—impose tax based on citizenship. On US citizenship taxation, see Ruth Mason, “Citizen Taxation” (2016) 89 S Cal L Rev 169.

4 See David Gliksberg, “The Effect of the Statist-Political Approach to International Jurisdiction of the Income Tax Regime—The Israeli Case” (1994) 15 Mich J Intl L 459 at 462-64; Peter Harris & David Oliver, International Commercial Tax (Cambridge University Press, 2010), DOI: https://doi.org/10.1017/CBO9780511777028.

5 See Economic and Financial Commission Report by the Experts on Double Taxation, Submitted to the Financial Committee on April 5th, 1923, LONEFO, Financial Committee, LON Doc E.F.S. 73/F. 19 (1923) [1923 Report]; Donald R Whittaker, “An Examination of the O.E.C.D. and U.N. Model Tax Treaties: History, Provisions and Application to U.S. Foreign Policy” (1982) 8 NCJ Intl L 39; Dale Pinto, E-Commerce and Source-based Income Taxation (IBFD BV, 2003); Shay Moyal, “Back to Basics: Rethinking Normative Principles in International Tax” (2019) 73 Tax Law 165, DOI: https://doi.org/10.2139/ssrn.3386678.

6 See Alexander W Cappelen, “The Moral Rationale for International Fiscal Law” (2001) 15 Ethics & Intl Affairs 97, DOI: https://doi.org/10.1111/j.1747-7093.2001.tb00346.x [Cappelen, “Moral Rationale”]; Avi-Yonah, “International Tax,” supra note 2; Harris & Oliver, supra note 4.

7 See 1923 Report, supra note 5.

8 See Dale Pinto, “Exclusive Source or Residence-Based Taxation - Is a New and Simpler World Tax Order Possible?” (2007) 61 BFIT 277. Pinto underlines various justifications for a shift to either exclusive residence-based or source-based taxation in light of changes imposed by the telecommunications era. As we demonstrate later in this article, changes in the methods of conducting international business—a consequence of digitalization—and the increasing importance of intellectual property have had a massive influence on what modern economists see as driving value for businesses. It is these changes in perception that now drive tax policymakers to try to redefine the threshold for some of the source rules. See generally, Werner Haslehner & Marie Lamensch, eds, Taxation and Value Creation (IBFD USA, 2001).

9 See generally, Canada’s Income Tax Act, RSC 1985, c 1 (5th Supp), ss 2(1), 115 (taxation of residents and non-residents, respectively); Companies Income Tax Act, Cap C21, LFN 2004 (as amended) (Nigeria), s 13 (taxation of non-resident corporations).

10 See Gliksberg, supra note 4 at 465.

11 See Harold Wurzel, “Foreign Investment and Extraterritorial Taxation” (1938) 38 Colum L Rev 809, DOI: https://doi.org/10.2307/1116739; Gliksberg, supra note 4 at 464; Paul L Baker, “An Analysis of Double Taxation Treaties and their Effect on Foreign Direct Investment” (2014) 21 Intl J Econs Bus 341, DOI: https://doi.org/10.1080/13571516.2014.968454.

12 See Diane Ring, “International Tax Relations: Theory and Implications” (2007) 60 Tax L Rev 83 [Ring, “International Tax Relations”].

13 See Graetz & O’Hear, supra note 3.

14 See Ke Chin Wang, “International Double Taxation of Income: Relief Through International Agreement 1921-1945” (1945) 59 Harv L Rev 73, DOI: https://doi.org/10.2307/1335505; Whittaker, supra note 5; Ring, “International Tax Relations,” supra note 12. The agenda of international tax has since evolved to include the prevention of double non-taxation as an equally important objective. See e.g., Reuven S Avi-Yonah, “Who Invented the Single Tax Principle?: An Essay on the History of U.S. Treaty Policy” (2014) 59 NYL Sch L Rev 305, DOI: https://doi.org/10.2139/ssrn.2226309; Philipp Genschel & Thomas Rixen, “Settling and Unsettling the Transnational Legal Order of International Taxation” in Terence C Halliday & Gregory Shaffer, eds, Transnational Legal Orders (Cambridge University Press, 2015) 154, DOI: https://doi.org/10.1017/CBO9781107707092.

15 See Reuven S Avi-Yonah, “Double Tax Treaties: An Introduction” in Karl P Sauvant & Lisa E Sachs, eds, The Effect of Treaties on Foreign Direct Investment: Bilateral Investment Treaties, Double Taxation Treaties, and Investment Flows (Oxford University Press, 2009) at 99, DOI: https://doi.org/10.1093/acprof:oso/9780195388534.001.0001. For an example of how taxation of royalties by the source country can be excluded, see OECD, Model Tax Convention on Income and on Capital (2017), art 12(1) [OECD, Model Tax Convention].

16 See Alexander W Cappelen, “National and International Distributive Justice in Bilateral Tax Treaties” (1999) 56 FinanzArchiv 424; Peggy B Musgrave, “Interjurisdictional Equity in Company Taxation: Principles and Applications to the European Union” in Sijbren Cnossen, ed, Taxing Capital Income in the European Union: Issues and Options for Reform (Oxford University Press, 2000) at 46, DOI: https://doi.org/10.1093/oso/9780198297833.001.0001 [Musgrave, “Interjurisdictional Equity”].

17 For drafting convenience, we use the term “low-income country” (in its singular and plural forms) to include similar terms such as “developing country” and “(net) capital-importing country.” Other appellations include “poor,” “Global South,” “least developed,” “less developed,” “lower-income,” and “low-to middle-income” country. The United Nations (UN) classifies countries into three groups, based on certain development evaluation criteria: developed economies, economies in transition, and developing economies. See United Nations, World Economic Situation and Prospects (United Nations, 2020), online (pdf): www.un.org/development/desa/dpad/wp-content/uploads/sites/45/WESP2020_Annex.pdf [perma.cc/U5GF-N6LX]. The UN previously adopted a four-tier classification of countries, based on income levels: low-income, lower middle income, upper middle income, and high-income. See United Nations, World Economic Situation and Prospects (United Nations, 2014), online (pdf): www.un.org/en/development/desa/policy/wesp/wesp_current/2014Chap1_en.pdf [perma.cc/LD8P-93YQ]. We also adopt the phrase “high-income country” as a working term for countries on the more positive side of the development index. This phrase, as we use it, encapsulates terms like “developed country,” “(net) capital-exporting country,” and “Global North” country.

18 See AJ Easson, International Tax Reform and the Inter-Nation Allocation of Tax Revenue (Victoria University Press, 1991); Diane Ring, “Democracy, Sovereignty and Tax Competition: The Role of Tax Sovereignty in Shaping Tax Cooperation” (2009) 9 Fla Tax Rev 555, DOI: https://doi.org/10.5744/ftr.2009.1053 [Ring, “Democracy”]; Kim Brooks & Richard Krever, “The Troubling Role of Tax Treaties” in Geerten MM Michielse & Victor Thuronyi, eds, Tax Design Issues Worldwide (Kluwer Law International, 2015) at 159.

19 See Julia Braun, “The Effects of Double Tax Treaties for Developing Countries. A Case Study of Austria’s Double Tax Treaty Network” (2016) 16 Pub Finance & Management 383, DOI: https:// doi.org/10.1177/152397211601600404; Martin Hearson, “When Do Developing Countries Negotiate Away Their Corporate Tax Base” (2018) 30 J Intl Development 233, DOI: https://doi.org/10.1002/jid.3351 [Hearson, “Developed Countries”].

20 See Charles R Irish, “International Double Taxation Agreements and Income Taxation at Source” (1974) 23 ICLQ 292 at 294, DOI: https://doi.org/10.1093/iclqaj/23.2.292. Irish notes at 294:

There appear to be several reasons for the emphasis on residence in tax agreements between developed countries. Probably the fundamental reason is that the emphasis on residence represents the more favorable alternative for the country with the stronger bargaining position. Frequently countries have an interest in capital, technology and services possessed by the taxpayers of other countries. In such instances, the “interested” country is the potential source country and the other is the potential residence country. As between the two countries, the potential residence country thus has the stronger economic position and the evidence indicates that it has used its superior position to “persuade” the source country to forgo tax revenues so as to insure availability of the desired capital, technology and services. This apparently is what happened immediately after World War II between the countries of Western Europe and the United States. At that time, the Western European countries were very interested in attracting United States capital and technology to rebuild and modernize their war-ravaged economies. In order to ensure the unfettered flow of such capital and technology into their economies, these countries accepted tax agreements with the United States with a heavy emphasis on the residence principle.

21 See Brooks & Krever, supra note 18; Braun, supra note 19; Michael Lennard, “Act of Creation: The OECD/G20 Test of ‘Value Creation’ as a Basis for Taxing Rights and Its Relevance to Developing Countries” (2018) 25 Transnat’l Corp 55, DOI: https://doi.org/10.18356/3db18835-en.

22 The subject of normative entitlement to tax (tax jurisdiction) is discussed in Part II.

23 See e.g., Irma Johanna Mosquera Valderrama, Dries Lesage & Wouter Lips, “Tax and Development: The Link Between International Taxation, The Base Erosion Profit Shifting Project and The 2030 Sustainable Development Agenda” (2018) United Nations University, Working Paper No W-2018/4; Miranda Stewart, “Redistribution Between Rich and Poor Countries” (2018) 72 BFIT 297, DOI: https://doi.org/10.59403/1mnx812; Allison Christians & Tarcisio Diniz Magalhães, “A New Global Tax Deal for the Digital Age” (2019) 67 Can Tax J 1153, DOI: https://doi.org/10.32721/ctj.2019.67.4.sym.christians.

24 The historical picture of international tax relations underscores the fact that countries’ sensitivity towards reaching compromises that are fair or that do not unduly deplete their tax base has been a major drag on the negotiation of international tax agreements. These sensitivities were partly responsible for the protracted negotiations of the initial bargain between the two World Wars. See Sol Picciotto, International Business Taxation, 2nd ed (Cambridge University Press, 2013); Genschel & Rixen, supra note 14. These sensitivities still prevail today as tax policymakers from different countries try to negotiate a multilateral agreement for taxation of the digital economy. See e.g., Julie Martin, “OECD report reveals disagreement on taxation of digital firms” (16 March 2018), online: MNE Tax mnetax.com/oecd-interim-report-reveals-disagreement-among-nations-on-taxation-of-digital-firms-26655 [perma.cc/Z83P-UN2K]; Silvia Amaro, “A Deal to Tax Tech Giants is Still Possible this Year, Irish Finance Minister Claims,” CNBC (28 August 2020), online: www.cnbc.com/2020/08/28/digital-tax-deal-at-the-oecd-possible-in-2020-says-irelands-donoghoe.html [perma.cc/6VPE-XU59]; Aaron Lorenzo & Mark Scott, “5 Things that Could Stop a Global Tax Deal,” Politico (8 June 2021), online: www.politico.eu/article/tax-reform-g7-oecd [perma.cc/TB73-SX4R]; PwC, “US Compromises with the UK, France, Italy, Spain and Austria on Digital Services Taxes and Trade Actions” (25 October 2021), online (pdf): www.pwc.com/gx/en/tax/newsletters/tax-policy-bulletin/assets/pwc-us-compromises-on-dsts-and-trade-actions.pdf [perma.cc/5V27-5SRX]; West African Tax Administrative Forum, “WATAF Commentary on the OECD/G20Inclusive Framework Two-Pillar Solution to Address the Tax Challenges” (8 October 2021), online: wataf-tax.org/2021/10/27/wataf-commentary-on-the-oecd-g20-inclusive-framework-two-pillar-solution-to-address-the-tax-challenges-arising-from-the-digitalisation-of-the-economy [perma.cc/AK9Y-JANW]; African Tax Administration Forum, “A New Era of International Taxation Rules – What Does This Mean for Africa?” (8 October 2021), online: www.ataftax.org/a-new-era-of-international-taxation-rules-what-does-this-mean-for-africa [perma.cc/UD4M-UYUL]; FE Bureau, “India, Others Oppose OECD Plan on Future Digital Taxes” (19 August 2022), online: www.financialexpress.com/economy/india-others-oppose-oecd-plan-on-future-digital-taxes/2635574 [perma.cc/8KEA-ZFT6].

25 See “Equity Considerations in International Taxation” (2001) 26 Brook J Intl L 1465 at 1467.

26 See Richard A Musgrave & Peggy B Musgrave, “Inter-nation Equity” in Richard M Bird and John G Head, eds, Modern Fiscal Issues: Essays in Honor of Carl S. Shoup (University of Toronto Press, 1972) at 63, DOI: https://doi.org/10.3138/9781442631984-006 [Musgrave & Musgrave, “Inter-nation Equity”]. Peggy Musgrave pioneered the concept in 1963. See Peggy Brewer Richman, Taxation of Foreign Investment Income: An Economic Analysis (Johns Hopkins University Press, 1963).

27 See Kaufman, supra note 25 at 1470.

28 See Musgrave & Musgrave, “Inter-nation Equity,” supra note 26; Kim Brooks, “Inter-Nation Equity: The Development of an Important but Underappreciated International Tax Value” in John G. Head and Richard Krever, eds, Tax Reform in the 21st Century: A Volume in Memory of Richard Musgrave (Kluwer Law International, 2009) at 473-74.

29 Ibid.

30 Since the seminal works of the Musgraves, international tax scholars have drawn on inter-nation equity to address numerous issues of fairness in bilateral or multilateral tax bargains. See e.g., Musgrave & Musgrave, “Inter-nation Equity,” supra note 26. In international tax discourse, the concept of inter-nation equity is utilized for various purposes. See e.g., Klaus Vogel, “Worldwide vs. Source Taxation of Income – A Review and Re-evaluation of Arguments (Part III)” (1988) 16 Intertax 393, DOI: https://doi.org/10.54648/TAXI1988068 (discussing the appropriateness of residence-based worldwide taxation); Joel P Trachtman, “International Regulatory Competition, Externalization, and Jurisdiction” (1993) 34 Harv Intl LJ 47 (examining the regulation of tax competition); OECD, Addressing the Tax Challenges of the Digital Economy, Action 1 - 2015 Final Report (OECD, 2015), online: www.oecd-ilibrary.org/taxation/addressing-the-tax-challenges-of-the-digital-economy-action-1-2015-final-report_9789264241046-en [perma.cc/8Q3T-4KC4] (for the allocation of taxing rights to the country where economic activities occur and where value is created); Justus Eisenbeiss, “BEPS Action 7: Evaluation of the Agency Permanent Establishment” (2016) 44 Intertax 481, DOI: https://doi.org/10.54648/TAXI2016039; Sven Hentschel, The Taxation of Permanent Establishments: A Critical Analysis of the Authorised OECD Approach and Its Implementation in German Tax Law under Specific Consideration of the Challenges Imposed to the PE Concept by the Digitalisation of the Economy (Springer, 2020) at 381, DOI: https://doi.org/10.1007/978-3-658-34000-1 (supporting the expansion of the existing concept of permanent establishment to include sales jurisdictions); Duncan Bentley, “Taxpayer Rights and Protections in a Digital Global Environment” in Robert F van Brederode, ed, Ethics and Taxation (Springer, 2020) at 251, DOI: https://doi.org/10.1007/978-981-15-0089-3_11 (buttressing a jurisdiction’s responsibility to protect the rights of its taxpayers in a global digital environment); Alexander Ezenagu, Unitary Taxation of Multinational Enterprises for a Just Allocation of Income: Nigeria as a Case Study of Africa’s Largest Economies (McGill University Libraries, 2019) (arguing that a shift to a global unitary tax system based on profit allocation by formulary apportionment approach will achieve fairer distribution of taxing rights); Irene JJ Burgers, “Value Creation and Inter-Nation Equity” in Werner Haslehner & Marie Lamensch, eds, Taxation and Value Creation (IBFD, 2021) at 171, DOI: https://doi.org/10.59403/g6321m008 (exploring whether the “value creation” basis of profit attribution would result in a fairer distribution of taxing rights, in the context of the OECD-led international tax reform efforts); Ariel Hakim P Lubis & Ning Rahayu, “Emphasizing Inter-Nation Equity in the New Digital Economy’s Taxing Rights Allocation Scheme” (2021) 11 Intl J Scientific & Research Publications 402, DOI: https://doi.org/10.29322/IJSRP.11.07.2021.p11553 (examining the prospects of fairness in the evolving OECD/G20 Pillar 1 tax bargain).

31 See Irish, supra note 20; Brooks & Krever, supra note 18; David Quentin, “Corporate Tax Reform and ‘Value Creation’: Towards Unfettered Diagonal Re-Allocation Across the Global Inequality Chain” (2017) 7 Accounting Econs & L 1, DOI: https://doi.org/10.1515/ael-2016-0020; Christians & Magalhães, supra note 23; Laurens van Apeldoorn, “Exploitation, International Taxation, and Global Justice” (2019) 77 Rev Soc Econ 163, DOI: https://doi.org/10.1080/00346764.2018.1525759; Cassandra Vet, Danny Cassimon & Anne Van de Vijver, “Getting the Short End of the Stick: Power Relations and Their Distributive Outcomes for Lower-Income Countries in Transfer Pricing Governance” in Irma Johanna Mosquera Valderrama, Dries Lesage & Wouter Lips, eds, Taxation, International Cooperation and the 2030 Sustainable Development Agenda (Springer, 2021) at 3, DOI: https://doi.org/10.1007/978-3-030-64857-2.

32 This fluid use of the concept has led some scholars to interrogate the meaning and scope of “inter-nation equity.” See Brooks, supra note 28 at 473. Brooks observes at 473 that

[g]iven that this 1972 essay forms the starting place for the analysis that follows; has been frequently misunderstood and inadequately developed by subsequent scholars; and constitutes the first major contribution to our understanding of inter- nation equity, a relatively detailed discussion of the argument made in the piece seems appropriate.

See also Ivan Ozai, “Inter-nation Equity Revisited” (2020) 12 Columbia J Tax L 58, DOI: https://doi.org/10.52214/cjtl.v12i1.7412. Ozai observes at 59, 61 that

[i]nter-nation equity has become a vague enough term that it is used to justify virtually any possible stance on how to distribute the international tax base while giving the impression that such a stance, because it is purportedly aligned with the concept of inter-nation equity, is grounded in some sense of fairness between nations…. The concept of inter-nation equity is now ubiquitous in the tax literature. Commentators have applied the concept to a wide array of subjects, frequently beyond the scenarios envisaged by the Musgraves themselves.

33 “Globalization, Tax Competition, and the Fiscal Crisis of the Welfare State” (2000) 113 Harv L Rev 1573 at 1649, DOI: https://doi.org/10.2307/1342445 [emphasis added]. Avi-Yonah supports this proposition with the assessment that

[s]ome of the current practice of international taxation can be interpreted as reflecting concern for the relatively greater revenue needs of poorer countries. In particular, the widespread acceptance of the source country’s right to levy its tax first and of the imposition of the burden of alleviating double taxation on the residence country partly reflects the position of the poorer (capital-importing) countries in the 1920s (ibid).

34 See “How to Redistribute? A Critical Examination of Mechanisms to Promote Global Wealth Redistribution” (2014) 64 UTLJ 317 at 320, DOI: https://doi.org/10.3138/utlj.0717.

35 Ibid at 334.

36 Ibid at 334-35.

37 Ibid at 319.

38 See “International Equity and Human Development” in Yariv Brauner & Miranda Stewart, eds, Tax Law and Development (Edward Edgar, 2013) at 209, DOI: https://doi.org/10.4337/9780857930019.00020.

39 Ibid at 231-34.

40 Ibid at 235 [emphasis added].

41 See e.g., Valderrama, Lesage & Lips, supra note 23; Alex Cobham, Tommaso Faccio & Valpy FitzGerald, “Global Inequalities in Taxing Rights: An Early Evaluation of the OECD Tax Reform Proposals” (2019) SocArXiv, DOI: https://doi.org/10.31235/osf.io/j3p48; Alexander Ezenagu, Unitary Taxation of Multinationals: Implications for Sustainable Development, New Thinking on SDGs and International Law, Policy Brief No 4 (Centre for International Governance Innovation, 2019); Martin Hearson, Joy W Ndubai & Tovony Randriamanalina, The Appropriateness of International Tax Norms to Developing Country Contexts, FACTI Background Paper 3 (FACTI, 2020); Tarcísio Diniz Magalhães & Ivan Ozai, “A Different Unified Approach to Global Tax Policy: Addressing the Challenges of Underdevelopment” (2021) 4 Nordic J on L & Society 1 at 18, DOI: https://doi.org/10.36368/njolas.v4i01.190; Sarah Ganter, “Digital Taxes for Sustainable Development?” (2021) 36 Digitalisation & Sustainability 49, DOI: https://doi.org/10.14512/OEWO360149.

42 Christians & Magalhães, supra note 23 at 1175 [emphasis added].

43 Ibid at 1176.

44 Ibid.

45 Ibid.

46 Ibid at 1177.

47 “Source-Based Taxing Rights from the OECD to the UN Model Conventions: Unavailing Efforts and an Argument for Reform” (2020) 13 L & Development Rev 193, DOI: https://doi.org/10.1515/ldr-2018-0073.

48 Ibid at 223.

49 Ibid at 224.

50 “Linking Policies: Inter-Nation Equity, Overseas Development Assistance, And Taxation” (2018) 91 Tax Notes Intl 1211 [Falcão, “Linking Policies”]. The OECD defines “official development assistance” (ODA) as grants or loans in foreign countries and territories (developing countries) and multilateral agencies active in development that are: “undertaken by the official sector; with the promotion of economic development and welfare as the main objective, at concessional financial” terms. See Richard Manning, Development Co-operation Report (OECD, 2005) at 260.

51 Falcão, “Linking Policies,” supra note 50 at 1211.

52 Ibid at 1215. See also Stewart, supra note 23. Stewart identifies “concessional tax treaty rules” as one of the mechanisms through which rich countries can discharge their obligation to help poor countries develop.

53 This might even be considered counterintuitive given the implicitness that the whole idea of the BEPS project is to eradicate base erosion, which would ultimately amount to greater revenue retention.

54 Authors have variously used the phrase “fiscal imperialism” to discuss undue influence or control by one country (or group of countries) over the tax policies or systems of other countries. “Fiscal” means that which relates to government revenue, especially taxes. “Imperialism,” on the other hand, refers to a policy, usually by economically and militarily more developed states, to extend their power and influence through diplomacy or force over less developed states. See Sergio André Rocha, “The Other Side of BEPS: ‘Imperial Taxation’ and ‘International Tax Imperialism’” in Sergio André Rocha & Allison Christians, eds, Tax Sovereignty in the BEPS Era (Kluwer Law International, 2017) 179 at 188 [Rocha, “The Other Side of BEPS”]. See e.g., William Vickrey, “An Updated Agenda for Progressive Taxation” (1992) 82 Am Econ Rev 257 at 260 (identifying elements of fiscal imperialism in the design of US foreign tax credit rules, which put “pressure on foreign countries to adapt their taxes to the US definition of a creditable tax”); Terry Dwyer, “The New Fiscal Imperialism” (2002) 18 Policy 12, DOI: https://doi.org/10.1080/10957960390237432; Ronald Saunders, “The Fight Against Fiscal Colonialism: The OECD and Small Jurisdictions” (2002) 91 The Round Table 325, DOI: https://doi.org/10.1080/0035853022000010317 (both decrying the OECD’s attempt to impose anti-tax competition policies on certain non-OECD countries—so-called low tax jurisdictions); Andrew F Quinlan, “FATCA and US Fiscal Imperialism Threaten to Sink Global Economy,” The Daily Caller (19 March 2013), online: dailycaller.com/2013/03/19/fatca-and-us-fiscal-imperialism-threaten-to-sink-global-economy [perma.cc/US3R-GYPQ] (criticizing the US government’s FATCA regime for its impact on foreign financial institutions); Bruce W Bean & Abbey L Wright, “The U.S. Foreign Account Tax Compliance Act: American Legal Imperialism?” (2015) 21 ILSA J Intl & Comp L 333; Chris Berg & Sinclair Davidson, “‘Stop This Greed’: The Tax-Avoidance Political Campaign in the OECD and Australia” (2017) 14 Econ J Watch 77 at 90 (arguing that the OECD pressuring countries to tax where they otherwise would choose not to tax could be viewed as a form of fiscal imperialism); Rocha, “The Other Side of BEPS,” supra note 54 (describing the OECD BEPS framework as a form of “international tax imperialism,” whereby, under the guise of multilateralism, the “International Tax Regime” may be reshaped in favour of developed countries); Tarcisio Diniz Magalhães, “What Is Really Wrong with Global Tax Governance and How to Properly Fix It” (2018) 10 WTJ 499 at 511, DOI: https://doi.org/10.59403/d1ykhw (describing the current international tax rules as a form of international fiscal imperialism, citing Sergio André Rocha, “International Fiscal Imperialism and the “Principle” of the Permanent Establishment” (2014) 68 BFIT 2, DOI: https://doi.org/10.59403/fer44m and Ricardo Garcia Antón, “The 21st Century Multilateralism in International Taxation: The Emperor’s New Clothes?” (2016) 8 WTJ 2, DOI: https://doi.org/10.59403/