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/10.59403/2y303hz [Magalhães, “What Is Really Wrong”]); Afton Titus, “Global Minimum Corporate Tax: A Death Knell for African Country Tax Policies?” (2022) 50 Intertax 414, DOI: https://doi.org/10.54648/TAXI2022038 (rejecting certain arguments advanced in favour of developing countries embracing the OECD-designed Pillar Two global minimum tax framework). In adopting the terminology, we contend that the sometimes-conflated use of “inter-nation equity” (in)advertently engenders fiscal imperialism by providing an ideological basis and justification for more powerful states to dominate the tax policies of their less powerful counterparts. While fiscal imperialism has typically been addressed from the perspective of sovereign acts, this article, uniquely, attempts to pre-empt fiscal imperialism by exposing how the propagation of knowledge lays the ideological foundation for fiscal imperialism across the international tax system. It stresses the cognitivist roots of fiscal imperialism.

55 See Menno R Kamminga, “Why Global Distributive Justice Cannot Work” (2006) 41 Acta Pol 21, DOI: https://doi.org/10.1057/palgrave.ap.5500136; Miriam Ronzoni, “Global Tax Governance: The Bullets Internationalists Must Bite – And Those They Must Not” (2014) 1 Moral Philosophy & Politics 37 at 45, DOI: https://doi.org/10.1515/mopp-2013-0015. For a synoptic examination of global distributive justice perspectives, see Simon Caney, “International Distributive Justice” (2001) 49 Political Studies 974, DOI: https://doi.org/10.1111/1467-9248.00351. Caney observes that the main school of global distributive justice is cosmopolitanism. Although there is a spectrum of perspectives on cosmopolitan distributive justice, a common thread that runs through them, according to Caney, is the conclusion that “the current system is extremely unjust and that a redistribution of wealth from the affluent to the impoverished is required” (ibid at 976). The underlying rationale of this common conclusion is that:

(a) [I]ndividuals have moral worth, (b) they have this equally, and (c) people’s equal moral worth generates moral reasons that are binding on everyone…[i]f we accept these (very plausible) ethical claims, it would be mysterious to claim that the duties imposed by a theory of justice should include only fellow citizens or fellow nationals. These universalist considerations imply that the scope of distributive justice should be global [and a person’s nationality or citizenship should not determine their entitlements] (ibid at 977).

While the general premise of cosmopolitan distributive justice—i.e., the emphasis on the imperative to reform an unjust system—is an acceptable bedrock for the reform of international tax regimes, the emphasis on wealth redistribution might convey the same problematic notion that the wealth in question (the tax base) is the preserve of the high-income state, subject to redistribution to the low-income state. It is only to the extent that cosmopolitan perspectives recognize a normative entitlement of the low-income state to the tax base, and thereupon the moral imperative of all states to ensure fair and equitable distribution, does the cosmopolitan view align with the import of allocative justice. In that sense, to the extent that principles of distributive justice transcend the shackles of national boundaries, inhabitants of both high-income and low-income states are entitled to a fair and adequate share of that which constitutes their commonwealth. Unless entitlement (allocative justice) is an undisputed foundation of the sharing conversation, the semantic theme of “redistribution,” conveyed as tax aid transfer, will undermine the bargaining muscle of low-income states.

56 There is extensive philosophical debate about whether high-income countries have a duty to assist low-income countries (“burdened societies”) to overcome endemic socioeconomic burdens. The “duty of assistance” theory is credited to John Rawls. See The Law of Peoples: With “The Idea of Public Reason Revisited” (Harvard University Press, 1999) at part III, DOI: https://doi.org/10.2307/j.ctv1pncngc. Rawls rejects global distributive justice and argues, instead, that “well ordered peoples” would, for the international scene, operate on eight principles (constituting his Law of Peoples), one of which is an altruistic duty to assist other people living in unfavourable conditions. The Rawlsian perspective has attracted both critics and defenders in great measure, ranging from those who see it as a betrayal of his earlier positions on (domestic) distributive justice (expressed in the 1971 book, A Theory of Justice) to those who regard it as a more sensible and moderate approach to international relations. See generally Allen Buchanan, “Rawls’s Law of Peoples: Principles for a Vanished Westphalian World” (2000) 110 Ethics 697, DOI: https://doi.org/10.1086/233370; John Tasioulas, “From Utopia to Kazanistan: John Rawls and the Law of Peoples” (2002) 22 Oxford J Leg Stud 367, DOI: https://doi.org/10.1093/ojls/22.2.367; Thomas Pogge, “‘Assisting’ the Global Poor” in Deen K Chatterjee, ed, The Ethics of Assistance: Morality and the Distant Needy (Cambridge University Press, 2004) at 260, DOI: https://doi.org/10.1017/CBO9780511817663.014; Thomas Pogge, “The Incoherence Between Rawls’s Theories of Justice” (2004) 72 Fordham L Rev 1739; Thomas Nagel, “The Problem of Global Justice” (2005) 33 Phil & Pub Aff 113, DOI: https://doi.org/10.1111/j.1088-4963.2005.00027.x; Mathias Risse, “What We Owe to the Global Poor” (2005) 9 J Ethics 81, DOI: https://doi.org/10.1007/s10892-004-3321-z; Joseph Heath, “Rawls on Global Distributive Justice: A Defence” (2005) 31 Can J Phil 193, DOI: https://doi.org/10.1080/00455091.2005.10716854; Chris Armstrong, “Defending the Duty of Assistance?” (2009) 35 Soc Theory & Prac 461, DOI: https://doi.org/10.5840/soctheorpract200935326; Sylvie Loriaux, “Fairness in International Economic Cooperation: Moving beyond Rawls’s Duty of Assistance” (2012) 15 Crit Rev Int’l Soc & Pol Philosophy 19, DOI: https://doi.org/10.1080/13698230.2011.572427; Rex Martin, “Rawls on International Economic Justice in The Law of Peoples” (2015) 127 J Bus Ethics 743, DOI: https://doi.org/10.1007/s10551-014-2184-x. For a broad review of responses, see Gillian Brock, “Recent Works on Rawls’s Law of Peoples: Critics Versus Defenders” (2010) 47 Am Phil Q 85. Without delving into this philosophical debate and without prejudice to their validity in other aspects of international relations, we are of the view that the duty that is integral to inter-nation equity is that high-income countries should not entrench regimes that erode the tax base of low-income countries. This notion is not based on the altruistic whims of high-income states, but on firmer grounds of allocative justice. See Ivan Ozai, “Two Accounts of International Tax Justice” (2020) 33 CJLJ 317 at 326, DOI: https://doi.org/10.1017/cjlj.2020.8. Ozai argues that

[o]ne does not need to embrace a non-relational global cosmopolitanism to hold the current international tax system as morally unjust. An intermediary position on global justice implies that international cooperation requires minimal mutual respect between political communities, which might not imply full global distributive justice but demands the absence of grave injustices (ibid).

57 When tax scholars discuss the premise for reform of international tax rules, it is important that their ideological leanings be made explicit. Given the conceptual fluidity of cosmopolitanism, debates about whether there is a cosmopolitan duty to change the distributional rules of international tax can reinforce the paternalistic outlook of international tax governance. For debates about the distributional rules of international tax, see generally Ilan Benshalom, “The New Poor at Our Gates: Global Justice Implications for International Trade and Tax Law” (2010) 85 NYU L Rev 1; Tsilly Dagan, “International Tax and Global Justice” (2017) 18 Theor Inq L 1, DOI: https://doi.org/10.1515/til-2017-0002; Stewart, 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; Peter Hongler, Justice in International Tax Law: A Normative Review of the International Tax Regime (IBFD, 2019) at part IV, DOI: https://doi.org/10.59403/1ss7gq; Dirk Broekhuijsen & Henk Vording, “What May We Expect of a Theory of International Tax Justice?” in Dominic de Cogan & Peter Harris, eds, Tax Justice and Tax Law: Understanding Unfairness in Tax Systems (Hart, 2020) at 155, DOI: https://doi.org/10.5040/9781509935024.ch-009; Ivan Ozai, “Origin and Differentiation in International Income Allocation” (2021) 44 Dal LJ 129.

58 “International Vertical Equity” (2021) 52 Loy U Chicago LJ 471 at 494 [emphasis added].

59 Johanna Stark, “Tax Justice Beyond National Borders––International or Interpersonal?” (2021) 42 Oxford J Leg Stud 133 at 133, DOI: https://doi.org/10.1093/ojls/gqab026 (absent a robust assumption of a benevolent and capable government on the recipient side, the reallocation of taxing rights from state to state does not necessarily help when it comes to fulfilling duties of justice towards individuals).

60 See e.g., OECD, “Public Consultation Document: Secretariat Proposal for a ‘Unified Approach’ Under Pillar One” (9 October 2019), online (pdf): OECD Web Archive web-archive.oecd.org/2019-10-10/532365-public-consultation-document-secretariat-proposal-unified-approach-pillar-one.pdf [perma.cc/X3D5-8LFY]; OECD, Tax Challenges Arising from Digitalization – Report on Pillar One Blueprint (OECD, 2020), DOI: https://doi.org/10.1787/beba0634-en [OECD, Pillar One Blueprint]; OECD, “Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy” (8 October 2021), online (pdf): www.oecd.org/tax/beps/statement-on-a-two-pillar-solution-to-address-the-tax-challenges-arising-from-the-digitalisation-of-the-economy-october-2021.pdf [perma.cc/7Y5Z-X2W9]; OECD, “Pillar One – Amount A: Draft Model Rules for Nexus and Revenue Sourcing” (4 February 2022), online (pdf): OECD Web Archive web-archive.oecd.org/2022-02-04/623615-public-consultation-document-pillar-one-amount-a-nexus-revenue-sourcing.pdf [perma.cc/5A3U-DB4S].

61 See Aitor Navarro, “The Allocation of Taxing Rights under Pillar One of the OECD Proposal” in Florian Haase & Georg Kofler, eds, The Oxford Handbook of International Tax Law (Oxford University Press, 2023) 951 at 960, DOI: https://doi.org/10.1093/oxfordhb/9780192897688.013.56 (discussing the dominant political power that the United States wields over the negotiations for a global digital tax deal). See also News Wires, “‘Very clear’ US is blocking Digital Tax talks, says French Finance Minister,” France 24 (9 September 2020), online: www.france24.com/en/20200909-very-clear-us-is-blocking-digital-tax-talks-says-french-finance-minister [perma.cc/8NU3-LMPW]; Andrea Shalal, Michael Nienaber & Leigh Thomas, “U.S. Drops ‘Safe Harbor’ Demand, Raising Hopes for Global Tax Deal,” Reuters (26 February 2021), online: www.reuters.com/article/idUSKBN2AQ2E5/#:~:text=WASHINGTON [perma.cc/H7DW-LSPC].

62 See Daniel Bunn, “A Summary of Criticisms of the EU Digital Tax” (October 2018), online (pdf): Tax Foundation files.taxfoundation.org/20181022090015/Tax-Foundation-FF618.pdf [perma.cc/5W3B-NP76]; Elizabeth Schulze, “France Approves Digital Tax on American Tech Giants, Defying US Trade Threat,” CNBC (11 July 2019), online: www.cnbc.com/2019/07/11/france-passes-digital-tax-on-us-tech-firms-despite-trade-threat.html [perma.cc/L58L-ARCR]; James Kane, “Taxing Digital Services Suggests the Government is Serious about Sovereignty” (1 April 2020), online: UK Institute for Government www.instituteforgovernment.org.uk/blog/digital-services-tax [perma.cc/KVN9-U7EM].

63 The characteristics of the subsisting bargain, as well as its impact on the taxing rights of low-income countries, are further discussed in Part II.

64 On global distributive justice and sustainable development, see e.g., Peder Hjorth, “Development Assistance and Sustainable Development: A Critical Assessment” (2015) 3 Am J Bus Econs & Management 75; Nandini Ramanujam, Nicholas Caivano & Alexander Agnello, “Distributive Justice and the Sustainable Development Goals: Delivering Agenda 2030 in India” (2019) 12 L & Development Rev 49, DOI: https://doi.org/10.1515/ldr-2019-0020.

65 See e.g., Gillian Brock, Global Justice: A Cosmopolitan Account (Oxford University Press, 2009), DOI: https://doi.org/10.1093/acprof:oso/9780199230938.001.0001 (proposing a global revenue mobilization initiative through various special tax regimes that are then channeled to the aid of poor peoples around the world); Ayelet Shachar, The Birthright Lottery: Citizenship and Global Inequality (Harvard University Press, 2009), DOI: https://doi.org/10.4159/9780674054592 (proposing a special “birthright privilege levy” on persons born into privileged societies to benefit those who through sheer luck were born in poor countries). See also David E Pozen, “Hidden Foreign Aid” (2007) 8 Fla Tax Rev 641, DOI: https://doi.org/10.5744/ftr.2007.1062 (contending that certain tax reliefs granted US non-profits operating overseas constitute ODA to the countries where they operate); Mitchell A Kane, “Bootstraps and Poverty Traps: Tax Treaties as Novel Tools for Development Finance” (2012) 29 Yale J Reg 255 (discussing the potential of low-income countries conceding their taxing rights through tax treaties to high-income countries in exchange for aid advances from high-income countries).

66 See JD Blum, “Distributive Justice and Global Health: A Call for a Global Corporate Tax” (2007) 26 Med & L 203.

67 Ibid. For the “avian flu” crisis, see e.g., Robert Roos, “Year-End Review: Avian Flu Emerged as High-Profile Issue in 2005” (5 January 2006), online: CIDRAP www.cidrap.umn.edu/avian-influenza-bird-flu/year-end-review-avian-flu-emerged-high-profile-issue-2005 [perma.cc/MDN4-QRFA]; Niti Mittal & Bikash Medhi, “The Bird Flu: A New Emerging Pandemic Threat and Its Pharmacological Intervention” (2007) 1 Intl J Health Sciences 277.

68 Blum, supra note 66 at 207-211.

69 Ibid.

70 Ibid at 209.

71 Ibid at 210-11.

72 Ibid at 208-09.

73 Ibid at 210.

74 Ibid at 209.

75 Ibid.

76 See “Introducing a 0.05% Financial Transactions Tax as an Instrument of Global Justice and Market Efficiency” (2014) 4 Asian J Intl L 153, DOI: https://doi.org/10.1017/S2044251313000271. See also Blum, supra note 66.

77 See Buckley, supra note 76. For the MDGs, see MDG Monitoring, “Category: Millennium Development Goals” (last visited 23 February 2014), online: www.mdgmonitor.org/millennium-development-goals [perma.cc/FB55-U27M].

78 See Buckley, supra note 76 at 158.

79 See “Repurposing Pillar One into an Incremental Global Tax for Sustainability: A Collective Response to a Global Crisis” (2021) 75 BFIT 230, DOI: https://doi.org/10.59403/3p2jk0g. For the content of the OECD’s Pillar One Blueprint, see supra note 60.

80 Chatel & Li, supra note 79 at 231-32.

81 Ibid.

82 Ibid at 240.

83 See e.g., Falcão, “Linking Policies,” supra note 50; Rosenzweig, supra note 58; Stark, supra note 59. Because redistribution envisages the transfer of revenue from one country to another, a redistributive tax framework may justify some form of accountability modalities that enable donor countries to track progress in the appropriation of the redistributed tax revenue by the recipient country. Tracking progress does not only embed donor countries in implementation, but also positions the leaders of donor countries to defend their redistributive policies before their domestic institutions of responsibility. This is different from a situation of allocative justice, where the allocation of taxing rights does not erode the fiscal sovereignty of the taxing state even if that state is devoid of responsible government.

84 Some scholars have championed the active involvement of non-governmental organizations (NGOs) in the international tax reform scene to enhance the legitimacy of the regime. See Cees Peters, “Global Tax Justice: Who’s Involved?” in Robert F van Brederode, ed, Ethics and Taxation (Springer, 2020) 165 at 168, 179, DOI: https://doi.org/10.1007/978-981-15-0089-3. It might be worth considering whether NGOs that are active coordinators of developmental aid delivery are also well-placed to develop such schemes in a way that tax policy experts may not be able to.

85 See e.g., Yariv Brauner, “What the BEPS?” (2014) 16 Fla Tax Rev 55, DOI: https://doi.org/10.5744/ftr.2014.1602; Eva Escribano López, “An Opportunistic, and yet Appropriate, Revision of the Source Threshold for the Twenty-First Century Tax Treaties” (2015) 43 Intertax 6, DOI: https://doi.org/10.54648/taxi2015002; Yariv Brauner, “Treaties in the Aftermath of BEPS” (2016) 41 Brook J Intl L 973, DOI: https://doi.org/10.2139/ssrn.2744712; Allison Christians, “BEPS and the New International Tax Order” (2016) 2016 BYUL Rev 1603; Reuven S Avi-Yonah & Haiyan Xu “Evaluating BEPS: A Reconsideration of the Benefits Principle and Proposal for UN Oversight” (2017) 6 Harvard Bus L Rev 185, DOI: https://doi.org/10.2139/ssrn.2716125; David Spencer, “BEPS and the Allocation of Taxing Rights–Part 1” (2017) 28 J Intl Tax 36; Wolfgang Schön, “One Answer to Why and How to Tax the Digitalized Economy” (2019) 47 Intertax 1003, DOI: https://doi.org/10.54648/taxi2019105; Carlo Garbarino, “The Impact of the OECD BEPs Project on Tax Treaties: Access, Entitlement and Investment Protection” (2020) 31 Eur Bus L Rev 763, DOI: https://doi.org/10.54648/eulr2020029; Ruth Mason, “The Transformation of International Tax” (2020) 114 Am J Intl L 353, DOI: https://doi.org/10.1017/ajil.2020.33.

86 See e.g., Tamer Budak, “The Transformation of International Tax Regime: Digital Economy” (2017) 8 Inonu U L Rev 297, DOI: https://doi.org/10.21492/inuhfd.354397; Monica Gianni, “OECD BEPS (In)Action 1: Factor Presence as a Solution to Tax Issues of the Digital Economy” (2018) 72 Tax Law 255, DOI: https://doi.org/10.2139/ssrn.3211971; Arthur J Cockfield, “Tax Wars: How to End the Conflict Over Taxing Global Digital Commerce” (2020) 17 Berkeley Bus LJ 347, DOI: https://doi.org/10.15779/Z38H70815H; Wei Cui, “The Digital Taxes on the Verge of Implementation” (2019) 67 Can Tax J 1135, DOI: https://doi.org/10.32721/Ctj.2019.67.4.sym.cui; Svitlana Buriak, “A New Taxing Right for the Market Jurisdiction: Where Are the Limits?” (2020) 48 Intertax 301, DOI: https://doi.org/10.54648/taxi2020026; Nolan McCarthy, “Addressing Complications in the International Tax Regime Resulting from the Digitalization of the Economy” (2020) 53 Intl Lawyer 453; Craig Elliffe, “International Tax Frameworks: Assessing the 2020s Compromise from the Perspective of Taxing the Digital Economy in the Great Lockdown” (2020) 74 BFIT 532, DOI: https://doi.org/10.59403/3qpc7ms; Richard Collier, Michael P Devereux & John Vella, “Comparing Proposals to Tax Some Profit in the Market Country” (2021) 13 WTJ 405, DOI: https://doi.org/10.59403/vj9y4k; Assaf Harpaz, “Taxation of the Digital Economy: Adapting a Twentieth-Century Tax System to a Twenty-First-Century Economy” (2021) 46 Yale J Intl L 57; Katherine E Karnosh, “The Application of International Tax Treaties to Digital Services Taxes” (2021) 21 Chicago J Intl L 513; Jinyan Li, “The Legal Challenges of Creating a Global Tax Regime with the OECD Pillar One Blueprint” (2021) 75 BFIT 84, DOI: https://doi.org/10.59403/1a68ax; Xiaorong Li, “A Potential Legal Rationale for Taxing Rights of Market Jurisdictions” (2021) 13 WTJ 25, DOI: https://doi.org/10.59403/1f2sb1d; Ana Paula Dourado, “Pillar Two Model Rules: Inequalities Raised by the Globe Rules, the Scope, and Carve-Outs” (2022) 50 Intertax 282, DOI: https://doi.org/10.54648/taxi2022035; Craig Elliffe, “The Brave (and Uncertain) New World of International Taxation under the 2020s Compromise” (2022) 14 WTJ 237, DOI: https://doi.org/10.59403/1h6s7gc.

87 For example, see Annet Wanyana Oguttu, “Tax Base Erosion and Profit Shifting in Africa – Part 1: What Should Africa’s Response Be to the OECD BEPS Action Plan?” (2015) 48 Comp & Intl LJS Afr 516; Irene Burgers & Irma Mosquera, “Corporate Taxation and BEPS: A Fair Slice for Developing Countries?” (2017) 10 Erasmus L Rev 29, DOI: https://doi.org/10.5553/ELR.000077; Lennard, supra note 21; Vet, Cassimon & de Vijver, supra note 31; Christians & Magalhães, supra note 23; Chatel & Li, supra note 79; Tebogo Lorencia Motaung, The Unintended Consequences of Tax Treaties and the Unfair Allocation of Treaty Taxing Rights from a Developing Country’s Perspective (MPhil Dissertation, University of Pretoria, 2020) [unpublished]; Tarcísio Diniz Magalhães, “International Tax Law Between Loyalty, Exit, and Voice” (2021) 44 Dal LJ 49 [Magalhães, “International Tax Law”]; Martin Hearson, Rasmus Corlin Christensen & Tovony Randriamanalina, “Developing Influence: The Power of ‘The Rest’ in Global Tax Governance” (2022) 30 Rev Intl Political Econ 841, DOI: https://doi.org/10.1080/09692290.2022.2039264.

88 See e.g., Musgrave & Musgrave, “Inter-nation Equity,” supra note 26; Stanley S Surrey, “United Nations Group of Experts and the Guidelines for Tax Treaties Between Developed and Developing Countries” (1978) 19 Harv Intl LJ 1; Edwin Van der Bruggen, “A Preliminary Look at the New UN Model Tax Convention” (2002) 2 Brit Tax Rev 119; Brooks & Krever, supra note 18 (urging a shift in the use of double tax treaties between high-income countries and low-income countries); Genschel & Rixen, supra note 14 at 161 (discussing the efforts of low-income countries to deviate from the entrenched but heavily residence-based taxing rights allocation formula contained in the OECD, Model Tax Convention); Guglielmo Maisto, “The History of Article 8 of the OECD Model Treaty on Taxation of Shipping and Air Transport” (2003) 31 Intertax 232, DOI: https://doi.org/10.54648/TAXI2003047 (discussing the resistance of some Latin American countries to the entrenchment of certain aspects of a proposed framework for the taxation of international shipping).

89 In using the term “right,” we are keen to emphasize the inherent lack of precision or perfection in the initial distribution of international taxing rights. As explained below, this imprecision and imperfection is present in the conceptualization of relevant principles like sovereignty, territoriality, economic allegiance, source, residence, et cetera. These principles form the building blocks of distribution. It is also inherent in the compromise nature of the initial distribution, which was either reluctantly embraced by many states or strenuously resisted by them. See Ring, “International Tax Relations,” supra note 12; Genschel & Rixen, supra note 14.

90 In other words, there are three components of the initial distribution of taxing rights. First, there is an economic component, which ties tax jurisdiction to the existence of economic allegiance. This is complemented by administrative feasibility, i.e., tax jurisdiction is only complete or meaningful if the state has a pragmatic means to assert it (usually by the presence of the tax base—person or property—within its territory). Once jurisdiction is so established, a third component—political brokering—comes in due to the clash of two (or more) countries’ tax jurisdictions. Political brokering between countries with conflicting tax jurisdiction produces a compromise or distribution that overlays, constrains, and restricts the exercise of the inherent tax jurisdiction of each state. This is what the double taxation regime is—a compromise or bargain. See Ring, “International Tax Relations,” supra note 12.

91 See Wang, supra note 14; Michael Lang, Introduction to the Law of Double Taxation Conventions, 2nd ed (IBFD, 2013), DOI: https://doi.org/10.59403/36eh018; Sunita Jogarajan, Double Taxation and the League of Nations (Cambridge University Press, 2018), DOI: https://doi.org/10.1017/9781108368865; Lara Friedlander & Scott Wilkie, “The History of Tax Treaty Provisions—And Why It Is Important to Know About It” (2006) 54 Can Tax J 907; Genschel & Rixen, supra note 14.

92 See generally Picciotto, supra note 24; Reuven S Avi-Yonah, “Structure of International Taxation: A Proposal for Simplification” (1996) 74 Tex L Rev 1301 at 1303, DOI: https://doi.org/10.2139/ssrn.3920264 [Avi-Yonah, “Structure of International Taxation”]; Genschel & Rixen, supra note 14 at 160.

93 See OECD Model Convention, supra note 15, arts 6, 7, 8, 10-12. See also Picciotto, supra note 24.

94 See OECD Model Convention, supra note 15, art 6.

95 Ibid, art 8.

96 Ibid, arts 10, 11.

97 Ibid.

98 Ibid, art 7.

99 See Wang, supra note 14; Irish, supra note 20.

100 See OECD, Model Tax Convention, supra note 15, art 9; Richard J Vann, “Reflections on Business Profits and the Arm’s-Length Principle,” in Brian J Arnold, Jacques Sasseville & Eric M Zolt, eds, The Taxation of Business Profits under Tax Treaties (Canadian Tax Foundation, 2003) 133 at 135; Richard S Collier & Joseph L Andrus, Transfer Pricing and the Arm’s Length Principle after BEPS (Oxford University Press, 2017); Lynne Oats, Angharad Miller & Emer Mulligan, Principles of International Taxation, 6th ed (Bloomsbury, 2017).

101 See Vann, supra note 100; Hubert Hamaekers, “Arm’s Length – How Long?” in Paul Kirchhof et al, eds, International and Comparative Taxation: Essays in Honour of Klaus Vogel (Kluwer Law International, 2002) at 29; Mary Bennett, “Article 7 – New OECD Rules for Attributing Profit to Permanent Establishments” in Dennis Weber & Stef van Weeghel, eds, The 2010 OECD Updates: Model Tax Convention & Transfer Pricing Guidelines: A Critical Review (Kluwer Law International, 2011) at 21.

102 This could be the fact that the taxpayer is primarily located in the state (residence) or that the income derives from activities carried on within the state (source), benefitting in either case from the environment that the state provides. See 1923 Report, supra note 5; Moyal, supra note 5.

103 See Ring, “International Tax Relations,” supra note 12; López, supra note 85 at 8.

104 See Ring, “International Tax Relations,” supra note 12; Michael Kobetsky, International Taxation of Permanent Establishments: Principles and Policy (Cambridge University Press, 2011), DOI: https://doi.org/10.1017/CBO9780511977855; Genschel & Rixen, supra note 14; Magalhães, “What Is Really Wrong,” supra note 54; Patrik Emblad “Power and Sovereignty. How Economic-Ideological Forces Constrain Sovereignty to Tax” (2021) 4 Nordic J L & Society 1 at 18, DOI: https://doi.org/10.36368/njolas.v4i01.206. As Emblad notes at 18:

When analyzing the development of the international tax order from a power perspective, however, it does become clear that this order is neither neutral nor equal. The international efforts to prevent double taxation in the early 20th century manifested themselves in a policy framework that favored economically stronger states. The efforts to prevent double non-taxation in the 21st century is not a correction of these inequalities, but rather a restoration of them.

105 See Kael Loewenstein, “Sovereignty and International Co-operation” (1954) 48 AJIL 222 at 223, DOI: https://doi.org/10.2307/2194372. Loewenstein argues that “the assumptions of both equality and the independence of states are fictions. States never have been, nor are they now, equal. They differ widely in their power potential and, consequently, also in the degree of their independence” (ibid).

106 See Genschel & Rixen, supra note 14; Magalhães, “International Tax Law,” supra note 87.

107 For our intended use of “right” see note 89, above.

108 This question may be also be framed as “what gives a country the right to tax?”

109 See Joseph H Beale, “Jurisdiction to Tax” (1919) 32 Harv L Rev 587, DOI: https://doi.org/ 10.2307/1327994. Beale collected quotes stating that

[t]he power to tax is one of the attributes of sovereignty; and the jurisdiction to exercise the power is coterminous with the bounds of the sovereign’s jurisdiction. “It is obvious that it is an incident of sovereignty, and is coextensive with that to which it is an incident. All subjects over which the sovereign power of a state extends are objects of taxation, but those over which it does not extend are, upon the soundest principles, exempt from taxation....The sovereignty of a state extends to everything which exists by its own authority or is introduced by its permission….The power to tax involves the power to destroy.” “The power of taxation, however vast in its character and searching in its extent, is necessarily limited to subjects within the jurisdiction of the state. These subjects are persons, property and business” (ibid at 587).

110 See Kees van Raad, Nondiscrimination in International Tax Law, 1st ed (Kluwer Law and Taxation, 1986) at 20-21; Rutsel Silvestre J Martha, The Jurisdiction to Tax in International Law: Theory and Practice of Legislative Fiscal Jurisdiction (Kluwer Law and Taxation, 1989); Cappelen, “Moral Rationale,” supra note 6.

111 See 1923 Report, supra note 5; Cappelen, “Moral Rationale,” supra note 6.

112 See 1923 Report, supra note 5.

113 Ibid at 22-23 [emphasis added].

114 Jinyan Li, Nathan Jin Bao & Huaning (Christina) Li, “Value Creation: A Constant Principle in a Changing World of International Taxation” (2019) 67 Can Tax J 1107, DOI: https://doi.org/10.32721/ctj.2019.67.4.sym.li (asserting that value creation is a modern reenactment of the traditional concept of economic allegiance).

115 See 1923 Report, supra note 5 at 20. The 1923 Report asserts that a taxpayer is obligated to contribute to each of the “several governments which render him service,” thereby incorporating the benefits principle into economic allegiance theorization.

116 See Musgrave, “Interjurisdictional Equity,” supra note 16; Ring, “International Tax Relations,” supra note 12; Harris & Oliver, supra note 4 at 43-44.

117 See Jinyan Li, Arthur Cockfield & J Scott Wilkie, International Taxation in Canada: Principles and Practices, 2nd ed (LexisNexis, 2011) at 19.

118 See Ring, “International Tax Relations,” supra note 12 at 117. As Ring notes:

Residence jurisdiction could be preferred on the grounds that: (1) It best reflects ability to pay (because the taxing state can “readily” base its taxation on the entirety of the taxpayer’s income and thus have an accurate sense of the taxpayer’s fiscal picture). (2) Income “belongs” to people (residence), not places (source). (3) People are less mobile than activities. (4) The source approach would put tremendous pressure on the definition of source (ibid) [emphasis added].

119 Ibid.

120 Maisto, supra note 88.

121 Ring, “International Tax Relations,” supra note 12 at 117.

122 Harris & Oliver, supra note 4 at 44.

123 See Alan R Johnson, Lawrence Nirenstein & Stephen E Wells, “Reciprocal Enforcement of Tax Claims through Tax Treaties” (1980) 33 Tax Law 469; Brenda Mallinak, “The Revenue Rule: A Common Law Doctrine for the Twenty-First Century” (2006) 16 Duke J Comp & Intl L 79. Mallinak argues that “[t]he revenue rule, a common law doctrine with origins in the eighteenth century, is a battleground in the twenty-first century….In its modern form the revenue rule generally allows courts to decline entertaining suits or enforcing foreign tax judgments or foreign revenue laws” (ibid at 79). Few countries—e.g., the United States and Canada—have collection language in their tax treaties. See Convention between Canada and the United States of America with Respect to Taxes on Income and on Capital, 26 September 1980 as amended by Protocols Amending the Convention Between Canada and the United States, 14 June 1983, 28 March 1984, 17 March 1995, 29 July 1997, 21 September 2007, art XXVI A(1); Sunita Doobay & Stanley C Ruchelman, “Collecting Another Country’s Taxes – Recent Experience in the Canada-U.S. Context” (November 2019), online (pdf): Blaney McMurtry LLP www.blaney.com/files/29173_collecting_another_countrys_taxes__recent_experience_in_the_canada-u_s__context.pdf [perma.cc/S82W-69W8].

124 See Richard Vann, “Current Trends in Balancing Residence and Source Taxation” (Sydney Law School Legal Studies Research Paper No 14/107, 2014) at 5, online: ssrn.com/abstract=2538269 [perma.cc/GHM5-GJQ8].

125 Ibid.

126 See Hugh J Ault, “Corporate Integration, Tax Treaties and the Division of the International Tax Base: Principles and Practices” (1992) 47 Tax L Rev 565 at 570.

127 See Picciotto, supra note 24; Ring, “International Tax Relations,” supra note 12; Jogarajan, supra note 91; Maisto supra note 88.

128 Genschel & Rixen, supra note 14.

129 Ibid.

130 For some discussion of the political process of the initial distribution, see Wang, supra note 14; Picciotto, supra note 24 at 18-39; Ring, “International Tax Relations,” supra note 12; Jogarajan, supra note 91; Magalhães, “International Tax Law,” supra note 87.

131 Ring, “International Tax Relations,” supra note 12.

132 Some of the early participants include Argentina, Belgium, Czechoslovakia, France, Germany, Italy, Japan, the Netherlands, Poland, Switzerland, the United Kingdom, the United States, and Venezuela. In contrast, most African countries were still under colonialism until the 1960s and did not have a place at the table.

133 For an explanation of the convergence of countries around the double taxation regime, see Elliott Ash & Omri Marian, “The Making of International Tax Law: Empirical Evidence from Tax Treaties Text” (2020) 24 Fla Tax Rev 151; Genschel & Rixen, supra note 14. For the role of Global North experts and institutions in the dissemination and universalization of Global North-developed international tax norms, see Carl S Shoup, Report on Japanese Taxation by the Shoup Mission (General Headquarters, Supreme Commander for the Allied Powers, 1949); Carl S Shoup et al, The Fiscal System of Venezuela: A Report (The Johns Hopkins Press, 1959); International Bank for Reconstruction and Development, The Economic Development of Tanganyika (The Johns Hopkins Press, 1961); Nicholas Kaldor, “Will Underdeveloped Countries Learn to Tax?” (1963) 41 Foreign Aff 410, DOI: https://doi.org/10.2307/20029626; Carl S Shoup et al, The Tax System of Liberia: Report of the Tax Mission (Columbia University Press, 1970); Miranda Stewart & Sunita Jogarajan, “The International Monetary Fund and Tax Reform” (2004) Brit Tax Rev 146; Roy W Bahl & Richard M Bird, “Tax Policy in Developing Countries: Looking Back—and Forward” (2008) 61 Nat’l Tax J 279, DOI: https://doi.org/10.17310/ntj.2008.2.06; Odd-Helge Fjeldstad, “Tax and Development: Donor Support to Strengthen Tax Systems in Developing Countries” (2014) 34 Pub Admin & Dev 182, DOI: https://doi.org/10.1002/pad.1676; Kim Brooks, “Portrait of a Tax Transplant Artist” (2020) 48 Intertax 698, DOI: https://doi.org/10.54648/TAXI2020065; Sunita Jogarajan, “The Origins of the International Tax Regime” in Yariv Brauner, ed, Research Handbook on International Taxation (Edward Elgar, 2020) 13, DOI: https://doi.org/10.4337/9781788975377.00012.

134 Ibid.

135 See Romero JS Tavares & Jeffrey Owens, “Human Capital in Value Creation and Post-BEPS Tax Policy: An Outlook” (2015) 69 BFIT 590, DOI: https://doi.org/10.59403/15tknh7.

136 The theoretical constructs that underpin the initial distribution of taxing rights, and the principles of international tax generally, were almost exclusively conceptualized by Global North experts and institutions and (as previously stated) transposed to countries around the world as universal norms. This means that Global North experts have had an overwhelming impact on what we regard as constituting value. Whatever the inadequacies of these conceptions, it is hard to dismiss the potential distributional impact of this epistemic monopoly in a world where we strive to tax income “where value is created.” See Allison Christians & Laurens van Apeldoorn, “Taxing Income Where Value Is Created” (2018) 22 Fla Tax Rev 1, DOI: https://doi.org/10.5744/ftr.2018.1014. For this reason, it is imperative, for allocative justice, that we better accommodate the theoretical perspectives of the Global South in forward-looking attempts to reimagine the apportionment of taxing rights according to value creation. Already we can see some emergent economic powers in the traditional Global South (BRICS) pushing for alternative approaches like location savings in attempts to preserve their tax jurisdiction. For insights on how Global North experts have shaped dominant economic thought and tax principles, see 1923 Report, supra note 5; Steven G Medema & Warren J Samuels, eds, The History of Economic Thought: A Reader (Routledge, 2003), DOI: https://doi.org/10.4324/9780203380291; Alessandro Roncaglia, The Wealth of Ideas: A History of Economic Thought (Cambridge University Press, 2005), DOI: https://doi.org/10.1017/CBO9780511492341; Ernesto Screpanti & Stefano Zamagni, An Outline of the History of Economic Thought, 2nd ed (Oxford University Press, 2005), DOI: https://doi.org/10.1093/0199279144.001.0001; William J Barber, A History of Economic Thought, 1st ed (Wesleyan University Press, 2009); Jürgen G Backhaus, ed, Handbook of the History of Economic Thought: Insights on the Founders of Modern Economics (Springer, 2012), DOI: https://doi.org/10.1007/978-1-4419-8336-7; Fritz Brugger & Rebecca Engebretsen, “Defenders of the Status Quo: Making Sense of the International Discourse on Transfer Pricing Methodologies” (2022) 29 Rev Intl Political Econ 307, DOI: https://doi.org/10.1080/09692290.2020.1807386.

137 See 1923 Report, supra note 5 at 22-23.

138 See Kathleen P Lundy, “The Taxation of E-Commerce: The Inapplicability of Physical Presence Necessitates an Economic Presence Standard” (2001) 8 Rich JL & Tech 12; Lara Friedlander & Scott Wilkie, “The History of Tax Treaty Provisions—And Why It Is Important to Know About It” (2007) 54 Can Tax J 907 at 910.

139 See David R Tillinghast, “The Impact of the Internet on the Taxation of International Transactions” (1996) 50 BIFD 524; Louise Fjord Kjærsgaard & Peter Koerver Schmidt, “Allocation of the Right to Tax Income from Digital Intermediary Platforms - Challenges and Possibilities for Taxation in the Jurisdiction of the User” (2018) Nordic J Commercial L 146 at 148.

140 See OECD, Model Tax Convention, supra note 15, art 7; López, supra note 85; Julie Bellemare, “Evolution of the Permanent Establishment Concept” (2017) 65 Can Tax J 725.

141 See OECD, Model Tax Convention, supra note 15, art 5(2).

142 Ibid, art 5(3) (requiring a “twelve month” period for a building site to constitute a permanent establishment).

143 See Wang, supra note 14; Picciotto, supra note 24 at 24.

144 Ibid.

145 See Georg Kofler, Gunter Mayr & Christopher Schlager, “Taxation of the Digital Economy: A Pragmatic Approach to Short-Term Measures” (2018) 58 ET 123 at 124, DOI: https://doi.org/10.59403/35fyx7b.

146 This may be viewed as a practical deviation from the 1923 Report which regards consumption as a part of the wealth creation chain, entitling the country of consumption to tax income. See supra note 5.

147 See Vikram Chand, “Allocation of Taxing Rights in the Digitalized Economy: Assessment of Potential Policy Solutions and Recommendation for a Simplified Residual Profit Split Method” (2019) 47 Intertax 1023 at 1028-29, DOI: https://doi.org/10.54648/taxi2019106.

148 See Paul E Steiger, “What a difference 25 Years makes,” CNBC (29 April 2014), online: www.cnbc.com/2014/04/29/what-a-difference-25-years-makes.html [perma.cc/3WUJ-9NYM]; Stefan Palios, “The Biggest Companies in the World: 50 Years Ago and Today” (5 November 2019), online: Pulse Blueprint pulseblueprint.com/lifestyle/learning/biggest-companies-in-the-world-50-years-ago-and-today [perma.cc/WM5T-QRVU].

149 See Kofler, Mayr & Schlager, supra note 145; Co-coordinator’s Report on Work of the Subcommittee on Transfer Pricing, UN DESA, 18th Sess, Committee of Experts on International Cooperation in Tax Matters, UN Doc E/C.18/2019/CRP.1; Ioannis Zachariadis, Multinational Enterprises, Value Creation and Taxation: Key Issues and Policy Developments, Briefing PE 637.971 (European Parliamentary Research Service, 2019); Alan J Auerbach, “Demystifying the Destination-Based Cash-Flow Tax” (2017) Brookings Papers on Econ Activity 409 at 413, DOI: https://doi.org/10.1353/eca.2017.0017; Julia Sinnig, “The Reflection of Data-Driven Value Creation in the 2018 OECD and EU Proposals” (2018) 27 EC Tax Rev 325, DOI: https://doi.org/10.54648/ECTA2018035; OECD, Addressing the Tax Challenges of the Digitalisation of the Economy: Public Consultation Document (OECD, 2019).

150 See Maarten F de Wilde, “Tax Jurisdiction in a Digitalizing Economy; Why ‘Online Profits’ are so Hard to Pin Down” (2015) 43 Intertax 796, DOI: https://doi.org/10.54648/TAXI2015072; David R Agrawal & William F Fox, “Taxes in an E-Commerce Generation” (2017) 24 Intl Tax & Pub Finance 903, DOI: https://doi.org/10.1007/s10797-016-9422-3; Francois Chadwick, “International Tax Rules for the Digital Era” (2019) Tax Notes Intl 709; Itai Grinberg, “International Taxation in an Era of Digital Disruption: Analyzing the Current Debate” (2019) 97 Taxes 73, DOI: https://doi.org/10.2139/ssrn.3275737; Pasquale Pistone, João Félix Pinto Nogueira & Betty Andrade, “The 2019 OECD Proposals for Addressing the Tax Challenges of the Digitalization of the Economy: An Assessment” (2019) Intl Tax Studies 3, DOI: https://doi.org/10.59403/2b9h5p9.

151 It is partly this air of discontent with the existing regime that has driven states to explore, both unilaterally and multilaterally, different solutions for taxing the profits of MNEs. It is fair to state that tax policymakers recognize these fundamental changes, which is why they have worked out a political compromise to expand the existing nexus for source state taxation to include the taxation of MNEs without a physical presence. Economic thinkers construct the normative foundations by demonstrating the heightened relevance of the market and intangibles to the creation of wealth for non-resident MNEs in the digital era. See e.g., Karl R Lang & Ting Li, “Introduction to the Special Issue: Business Value Creation Enabled by Social Technology” (2013) 18 Intl J Electronic Commerce 5, DOI: https://doi.org/10.2753/JEC1086-4415180200; Johannes Becker & Joachim Englisch, “Taxing Where Value Is Created: What’s ‘User Involvement’ Got to Do with It?” (2019) 47 Intertax 161, DOI: https://doi.org/10.54648/TAXI2019015; Wei Cui, “The Digital Services Tax: A Conceptual Defense” (2019) 73 Tax L Rev 69, DOI: https://doi.org/10.2139/ssrn.3273641; Schön, supra note 85; Haslehner & Lamensch, supra note 8; Gabriel Antonio Sullivan, “Digital Economy – Value generation, Taxing Powers and Proposal for the Income Tax Collection” (29 September 2020), online: CIAT www.ciat.org/ciatblog-generacion-de-valor-potestad-tributaria-y-propuesta-para-la-recaudacion-del-ir/?lang=en [perma.cc/JM32-F9GJ]; Gaurav Dhooper, “Drivers Of Value Creation In Digital Economy” (27 August 2020), online: AIM analyticsindiamag.com/drivers-of-value-creation-in-digital-economy [perma.cc/SDP4-QZTS]; Zhenlong Miao, “Digital Economy Value Chain: Concept, Model Structure, and Mechanism” (2021) 53 Applied Econs 4342, DOI: https://doi.org/10.1080/00036846.2021.1899121.

152 See Ring, “International Tax Relations,” supra note 12 at 117.

153 See Musgrave, “Interjurisdictional Equity,” supra note 16 at 49; Peter Dietsch, Catching Capital: The Ethics of Tax Competition (Oxford University Press, 2015), DOI: https://doi.org/10.1093/acprof:oso/9780190251512.001.0001; Ivan O Ozai, “Tax Competition and the Ethics of Burden Sharing” (2018) 42 Fordham Intl LJ 61; Brooks & Krever, supra note 18 at 165. As noted by Brooks & Krever:

Since the early days of treaty design spearheaded by the League of Nations, times have changed dramatically. Globalization, financial innovation, and increased reliance on services and intangibles as the key generators of business profit have undermined or largely eliminated the potential for simpler administration of residence-based taxation (ibid).

154 See Avi-Yonah, “The Structure of International Taxation,” supra note 92; Ring, “International Tax Relations,” supra note 12.

155 See Prem Sikka & Mark P Hampton, “The Role of Accountancy Firms in Tax Avoidance: Some Evidence and Issues” (2005) 29 Accounting Forum 325, DOI: https://doi.org/10.1016/j.accfor.2005.03.008; Steven A Dean, “A Constitutional Moment in Cross-Border Taxation” (2021) 1 J on Financing for Development 1 at 10.

156 See Ring, “International Tax Relations,” supra note 12.

157 See e.g., OECD, Tax Administration 2021: Comparative Information on OECD and Other Advanced and Emerging Economies (OECD, 2021) at 3, DOI: https://doi.org/10.1787/cef472b9-en. The source states that

[o]ne of the trends identified in this and recent editions of the Tax Administration Series has been the increase in e-administration over recent years, with tax administrations investing significant resources in moving more of their processes online. This has not only enhanced service delivery, reduced burdens and improved compliance, but it has also made us more resilient (ibid).

158 Alberto Barreix, Jerónimo Roca & Fernando Velayos, A Brief History of Tax Transparency, Discussion Paper No IDP-DP-453 (Inter-American Development Bank, 2016), DOI: https://doi.org/10.18235/0000405.

159 See OECD, Declaration on Automatic Exchange of Information in Tax Matters (OECD, 2014). The declaration enhances articles 4 and 6 of the Convention on Mutual Administrative Assistance in Tax Matters (opened for signature on 25 January 1988 and entered into force on 1 June 2011) which relate to the exchange of information for tax collection purposes. See also OECD, Guidance on the Implementation of Country-by-Country Reporting: BEPS Action 13 (OECD, 2022). Taking the tax transparency initiative to a higher level, the European Union proposes to establish a public country-by-country reporting (CBCR) directive, which would require MNEs operating in the European Union single market to publicly disclose some key operational and tax payment information on a CBCR basis. See Council of the EU, “Public Country-by-Country Reporting: Council Paves the Way for Greater Corporate Transparency for Big Multinationals” (28 September 2021), online: www.consilium.europa.eu/en/press/press-releases/2021/09/28/public-country-by-country-reporting-council-paves-the-way-for-greater-corporate-transparency-for-big-multinationals [perma.cc/7QA7-895D].

160 See e.g., Oladiwura Ayeyemi Eyitayo, “Profit Shifting by Canadian Multinational Corporations: Prospects of Reversal under Canada’s Country-by-Country Reporting Rules” (2018) 26 Dal J Leg Stud 79 (arguing that Canada’s draft CBCR rules were inadequate for the purpose of combatting base erosion and profit shifting); Arco CP Bobeldijk & Paul Klaassen, “Country-by-Country Reporting and the Effective Tax Rate: How Effective Is the Effective Tax Rate in Detecting Tax Avoidance in Country-by-Country Reports?” (2019) 47 Intertax 1057, DOI: https://doi.org/10.54648/TAXI2019108 (arguing that the effective tax rate calculated based on the CBCR cannot be accurately used in high level risk analyses of tax avoidance); Annet Wanyana Oguttu, “Curtailing BEPS through Enforcing Corporate Transparency: The Challenges of Implementing Country-by-Country Reporting in Developing Countries and the Case for Making Public Country-by-Country Reporting Mandatory” (2020) WTJ 167 (arguing that the absence of a public CBCR regime hampers the capacity of developing country tax administrations to access CBCR reports).

161 See Felix Hugger, “The Impact of Country-by-Country Reporting on Corporate Tax Avoidance” (2019) CESifo, Working Paper No 304 (finding, in part, that CBCR reduces the shifting of profits from high tax jurisdictions); Preetika Joshi et al, “Does Public Country-by-Country Reporting Deter Tax Avoidance and Income Shifting? Evidence from the European Banking Industry” (2020) 37 Contemporary Accounting Research 2357, DOI: https://doi.org/10.1111/1911-3846.12601 (finding, generally, that increased transparency from CBCR can deter tax-motivated income shifting).

162 See Fjeldstad, supra note 133 at 187; Garima Pande & Rahul Patni, Tax Technology and Transformation: Tax Functions ‘Go Digital’ (EY, 2017), online (pdf): assets.ey.com/content/dam/ey-sites/ey-com/en_gl/topics/digital/ey-tax-technology-transformation.pdf [perma.cc/Y4VQ-DR6R].

163 See Helena Strauss, Tyson Fawcett & Danie Schutte, “An Evaluation of the Digital Response of Tax Authorities to Optimise Tax Administration within the Digitalised Economy” (2020) 18 eJ Tax Research 382 at 389. The sampled countries were Australia, China, Finland, India, the United Kingdom, the United States, New Zealand, and South Africa.

164 Deloitte, Economic Impact of Real-time Payments: Research Report (Deloitte, 2019), online (pdf): www2.deloitte.com/content/dam/Deloitte/uk/Documents/financial-services/deloitte-uk-economic-impact-of-real-time-payments-report-vocalink-mastercard-april-2019.pdf [perma.cc/NZV4-8ZWN].

165 Maisto, supra note 88.

166 See Tatiana Falcão, “Can the Digital Economy Debate Improve the Taxation of International Shipping Profits?” (2020) 99 Tax Notes Intl 1065.

167 See Bob Michel & Tatiana Falcão, “Taxing Profits from International Maritime Shipping in Africa: Past, Present and Future of UN Model Article 8 (Alternative B)” (2021) International Centre for Tax and Development, Working Paper No 133 at 3, DOI: https://doi.org/10.19088/ICTD.2021.023.

168 See Model Double Taxation Convention Between Developed and Developing Countries, UN DESA, 2021, UN Doc ST/ES A/378 at 16-17.

169 Michel & Falcão, supra note 167.

170 See Amar Mehta, “Taxation of Shipping Income under Tax Treaties — Development of Case Law in India” (2015) 21 Asia-Pacific Tax Bull, DOI: https://doi.org/10.59403/3j8bd9b (noting that about 90 per cent of India’s maritime cargo is handled by foreign carriers).

171 See Martin Placek, “Container Shipping – Statistics & Facts” (23 September 2021), online: Statista www.statista.com/topics/1367/container-shipping/#topicHeader__wrapper [perma.cc/C548-JXYC]. Placek states that “global maritime container trade is estimated to account for around 60 percent of all seaborne trade, which was valued at around 14 trillion U.S. dollars in 2019.”

172 See Wang, supra note 14; Picciotto, supra note 24; Ring, “International Tax Relations,” supra note 12; Genschel & Rixen, supra note 14.

173 Ibid.

174 Capital-exporting countries then were mainly the United States, the United Kingdom, and the Netherlands, while capital-importing countries were mainly France, Germany, and Italy. See Genschel & Rixen, supra note 14 at 160.

175 See Ring, “International Tax Relations,” supra note 12.

176 See Kobetsky, supra note 104 at 142-49. Kobetsky describes the collision between capital-importing countries and capital-exporting countries over two draft model treaties that were framed around the end of the Second World War: the Mexico Model of 1943 and the London Model of 1946. The latter would eventually prevail largely due to its preference by the great powers. Ironically, the capital-importing countries of Europe grew into accepting the skewed arrangement after the emergence of many newly independent countries, especially in Africa, because these European countries were capital exporters to the newly independent countries. See also Genschel & Rixen, supra note 14 at 162.

177 See Ring, “International Tax Relations,” supra note 12 at 123-24; Michel & Falcão, supra note 167; Thornton Matheson, Victoria Perry & Chandara Veung, “Territorial vs. Worldwide Corporate Taxation: Implications for Developing Countries” (2013) International Monetary Fund, Working Paper No 13/205 at 3, DOI: https://doi.org/10.5089/9781484329764.001. Matheson, Perry & Veung observe that “the historical framework for cross-border income tax arrangements, which began to evolve in the early twentieth century to handle income flows between advanced economies, appears increasingly poorly suited to allow low-income countries effectively to generate tax revenues from profits on foreign direct investment” (ibid).

178 Matheson, Perry & Veung, supra note 177; Genschel & Rixen, supra note 14.

179 See Jeffrey W Legro & Andrew Moravcsik, “Is Anybody Still a Realist?” (1999) 24 Intl Security 5, DOI: https://doi.org/10.1162/016228899560130; JC Sharman, “Seeing Like the OECD on Tax” (2012) 17 New Political Econ 17 at 24, DOI: https://doi.org/10.1080/13563467.2011.569022; Rocha, “The Other Side of BEPS,” supra note 54 at 188; Magalhães, “International Tax Law,” supra note 87; Emblad, supra note 104 at 18; Martin Hearson, Imposing Standards: The North-South Dimension to Global Tax Politics (Cornell University Press, 2021), DOI: https://doi.org/10.1515/9781501756009; Genschel & Rixen, supra note 14 at 162. Genschel & Rixen state that

[w]ith respect to non-Western states, all Western states were capital exporters. This facilitated their eventual convergence on the OECD Convention’s heavily residence-based rules for taxing cross-border (passive) income flows. Second, power asymmetry: The Western countries dominated the world economy. They were the main global suppliers of real, financial, and human capital. The rest of the world depended on Western investment more than the West in turn depended on investment from the rest of the world. This gave Western governments extensive power to dictate the terms under which cross-border flows of investment income are taxed (ibid).

180 It may not have been as obvious in 1972 when the Musgraves published their landmark paper on inter-nation equity, but we have become better apprised of the dire effects of an international tax regime that effectively robs low-income countries of taxing rights. See Dirk Broekhuijsen & Henk Vording, “What May We Expect of a Theory of International Tax Justice?” in Dominic de Cogan & Peter Harris, eds, Tax Justice and Tax Law: Understanding Unfairness in Tax Systems (Hart, 2020) 155 at 160, DOI: https://doi.org/10.5040/9781509935024.ch-009. Broekhuijsen and Vording state that

the attractiveness of some international tax equity norm that would support the taxing rights of (developing) source countries is evident. The Musgraves’ proposal to found an ‘inter-nation tax equity’ norm was not taken up quickly, perhaps because it did not address a problem felt to be urgent at the time. That only changed over the last two decades, and NGOs like Oxfam and Tax Justice deserve credit for it (ibid).

181 “Global Distribution of Revenue Loss from Corporate Tax Avoidance: Re-Estimation and Country Results” (2018) 30 J Intl Development 206, DOI: https://doi.org/10.1002/jid.3348. See also Linnea Mills, Barriers to Increasing Tax Revenue in Developing Countries, K4D Helpdesk Report (Institute of Development Studies, 2017). Linnea states that

[m]any developing countries have effectively signed away their rights to tax multinational companies operating within their borders through bilateral tax treaties. Aggregate estimates of the scale of the problem are not available but some country assessments are indicative of the problem. It is estimated that developing countries lost over US$ 800 million in 2011 as a result of treaties with the Netherlands alone, and estimates show that US tax treaties cost non-OECD countries around US$ 1.6 billion in 2010 (ibid at 2).

182 The Impact of Tax Treaties on Revenue Collection: A Case Study of Developing and Least Developed Countries (ActionAid International Secretariat, 2018).

183 Ibid.

184 Ibid.

185 See Eric Neumayer, “Do Double Taxation Treaties Increase Foreign Direct Investment to Developing Countries?” (2007) 43 J Dev Stud 1501, DOI: https://doi.org/10.1080/00220380701611535.

186 See Richard M Bird & Eric M Zolt, “Redistribution via Taxation: The Limited Role of the Personal Income Tax in Developing Countries” (2005) 52 UCLA L Rev 1627 at 1656; Ernesto Crivelli, Ruud De Mooij & Michael Keen, “Base Erosion, Profit Shifting and Developing Countries” (2016) 72 FinanzArchiv 268 at 269, DOI: https://doi.org/10.1628/001522116X14646834385460; Reuven S Avi-Yonah, “Hanging Together: A Multilateral Approach to Taxing Multinationals” (2016) 5 Michigan Bus & Entrepreneurial L Rev 137 at 139, DOI: https://doi.org/10.36639/mbelr.5.2.hanging [Avi-Yonah, “Hanging Together”]; Martin Hearson, “The Challenges for Developing Countries in International Tax Justice” (2018) 54 J Dev Stud 1932 at 1933, DOI: https://doi.org/10.1080/00220388.2017.1309040.

187 See Brooks & Krever, supra note 18; ActionAid, supra note 182; Ring, “Democracy,” supra note 18 at 584. Ring notes:

Bilateral double tax treaties face scrutiny as inappropriately favoring capital exporting nations through their allocation of primary and residual taxing rights. Developing countries reportedly have made “concessions” in tax treaties without a full awareness of their implications because they believed the provisions were standard and because the provisions were formally reciprocal (enhancing their appearance of mutuality and comparable impact) (ibid).

188 See Tsilly Dagan, “The Tax Treaties Myth” (2000) 32 NYUJ Intl L & Pol 939 at 939 [Dagan, “Tax Treaties Myth”]. Dagan states that tax treaties “serve…much more cynical goals, particularly redistributing tax revenues from the poorer to the richer signatory countries.”

189 See Fabian Barthel, Matthias Busse & Eric Neumayer, “The Impact of Double Taxation Treaties on Foreign Direct Investment: Evidence from Large Dyadic Panel Data” (2010) 28 Contemporary Econ Pol’y 366, DOI: https://doi.org/10.1111/j.1465-7287.2009.00185.x.

190 See David McNair, Rebecca Dottey & Alex Cobham, “Transfer Pricing, and the Taxing Rights of Developing Countries” (2010), online (pdf): Christian Aid www-staging.christianaid.ie/sites/default/files/2017-08/transfer-pricing-november-2010_0.pdf [perma.cc/K634-WSV4]; Joel Cooper et al, Transfer Pricing and Developing Economies: A Handbook for Policy Makers and Practitioners (World Bank Group, 2017) at 9, DOI: https://doi.org/10.1596/978-1-4648-0969-9; Annet Wanyana Oguttu, “Tax Base Erosion and Profit Shifting in Africa - Part 2: A Critique of Some Priority OECD Actions from an African Perspective - Preventing Excessive Interest Deductions and Tax Treaty Abuse” (2016) 49 Comp & Intl LJS Afr 130; UNCTAD, Tackling Illicit Financial Flows for Sustainable Development in Africa. Economic Development in Africa Report (United Nations, 2020).

191 See e.g., Cobham & Janský, supra note 181; Muhammad Ashfaq Ahmed, “United Nations Model Tax Convention Article 5: The Predatory Ploy – A Neo-Marxist Mapping of the Permanent Establishment” (2020) 17 Manchester J Intl Econ L 186.

192 See Clemens Fuest & Nadine Riedel, Tax Evasion, Tax Avoidance and Tax Expenditures in Developing Countries: A Review of the Literature (UK Department for International Development, 2009), online: www.gov.uk/research-for-development-outputs/tax-evasion-tax-avoidance-and-tax-expenditures-in-developing-countries-a-review-of-the-literature [perma.cc/EW52-AF9X]; Favourable Sebele-Mpofu, Eukeria Mashiri & Samantha Chantelle Schwartz, “An Exposition of Transfer Pricing Motives, Strategies and Their Implementation in Tax Avoidance by MNEs in Developing Countries” (2021) 8 Cogent Bus & Mgmt 1, DOI: https://doi.org/10.1080/23311975.2021.1944007. For a more positive take, see Hema Soondram, Martin Samy & Bhavish Jugurnath, “The Social Welfare Impact of Double Tax Treaties in Sub Saharan Africa” (2022) 18 Soc Responsibility J 141, DOI: https://doi.org/10.1108/SRJ-08-2020-0326. Soondram, Samy and Jugurnath find

that (i) the net effect from the complementarity between tax revenue and double tax treaty (DTTs) in influencing the human development is for the most part negative[;] (ii) the impact of tax revenue from international trade has the most positive net effect as compared to other tax revenues when interacted with the DTT[;] and (iii) the DTT complements the tax revenue from income, profits and capital gains to progressively increase human development in the upper quartiles of HDI (ibid at 141).

193 An example is the Tax Inspectors Without Borders (TIWB), a joint initiative of the OECD and the United Nations Development Program (UNDP) which shares expert assistance and transfers tax audit experience with tax administrations in developing countries. For a summary of the European Union’s efforts, see Giulia Mascagni, Mick Moore & Rhiannon McCluskey, Tax Revenue Mobilisation in Developing Countries: Issues and Challenges (European Union, 2014) at 19-24, online (pdf): European Parliament www.europarl.europa.eu/RegData/etudes/etudes/join/2014/433849/EXPO-DEVE_ET(2014)433849_EN.pdf [perma.cc/E4PF-5ND3].

194 Tony Addison, George Mavrotas & Mark McGillivray, “Development Assistance and Development Finance: Evidence and Global Policy Agendas” (2005) 17 J Intl Development 819, DOI: https://doi.org/10.1002/jid.1243; Léonce Ndikumana, “International Tax Cooperation and Implications of Globalization” in José Antonio Alonso & José Antonio Ocampo, eds, Global Governance and Rules for the Post-2015 Era: Addressing Emerigng Issues in the Global Environment (Bloomsbury, 2015); Falcão, “Linking Policies,” supra note 50.

195 Magalhães, “What Is Really Wrong,” supra note 54 at 511.

196 Vet, Cassimon & de Vijver, supra note 31.

197 See Alex Cobham, “Tax Evasion, Tax Avoidance and Development Finance” (2005) Queen Elizabeth House, Working Paper No 129; Jason Hickel, “Aid in Reverse: How Poor Countries Develop Rich Countries,” The Guardian (14 January 2017) online: www.theguardian.com/global-development-professionals-network/2017/jan/14/aid-in-reverse-how-poor-countries-develop-rich-countries [perma.cc/Y9KT-GAUF].

198 See Suborna Barua, “Financing Sustainable Development Goals: A Review of Challenges and Mitigation Strategies” (2020) 3 Bus Strategy & Development 277, DOI: https://doi.org/10.1002/bsd2.94; United Nations Inter-agency Task Force on Financing for Development, Financing For Sustainable Development Report 2021 (United Nations, 2021); James X Zhan & Amelia U Santos-Paulino, “Investing in the Sustainable Development Goals: Mobilization, Channeling, and Impact” (2021) 4 J Intl Bus Pol’y 166, DOI: https://doi.org/10.1057/s42214-020-00093-3.

199 See Pinto, supra note 8.

200 For efforts of reforms, see e.g., Eli Hadzhieva, Tax Challenges in the Digital Economy (European Union, 2016), online (pdf): European Parliament www.europarl.europa.eu/RegData/etudes/STUD/2016/579002/IPOL_STU(2016)579002_EN.pdf [perma.cc/H5FK-YA8B]; Christians & Magalhães, supra note 23; David Hanrahan, “Digitalization as a Determinant of Tax Revenues in OECD Countries: A Static and Dynamic Panel Data Analysis” (2021) 7 Athens J Bus & Econ 321, DOI: https://doi.org/10.30958/ajbe.7-4-2. This push led to complex OECD-led negotiations that eventually produced a compromise on taxation of the digital economy. See OECD, Pillar One Blueprint, supra note 60. The willingness of many high-income countries, including Canada and France, to take unilateral but potentially disruptive measures to reassert their tax jurisdiction further underscores this point. See Bjarke Smith-Meyer & Elisa Braun, “France Reinstates Digital Tax, Courting Trade War,” Politico (14 October 2020), online: www.politico.eu/article/france-reinstates-digital-tax-courting-trade-war [perma.cc/VN3X-8AST]; John V Aksak & Jason Carter, “Will the US Withdrawal from the OECD Project on Digital Services Taxation Lead to a Trade War and a Missed deadline?” (22 June 2020), online: True Partners Consulting www.tpctax.com/insights/will-the-us-withdrawal-from-the-oecd-project-on-digital-services-taxation-lead-to-a-trade-war-and-a-missed-deadline [perma.cc/L5LZ-SKU8]; Jack Purcher, “U.S. Chamber of Commerce Urges the Trump Administration to Block Canada’s Proposed France-Styled Tax on U.S. Tech Companies” (15 November 2019), online: www.patentlyapple.com/2019/11/us-chamber-of-commerce-urges-the-trump-administration-to-block-canadas-proposed-france-styled-tax-on.html; 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/C7ZJ-B99G]; Lorraine Eden, “Canada and the United States: Winners or Losers from Pillar One Amount A?” (2021) 50 Tax Mgmt Intl J 143; Stephanie Soong Johnston, “USTR Must push Back If Canada Moves on Digital Tax, Senators Say” (14 January 2022), online: www.taxnotes.com/tax-notes-international/digital-economy/ustr-must-push-back-if-canada-moves-digital-tax-senators-say/2022/01/17/7d37x [perma.cc/B2AS-A8EU]; Karl Bode, “Europe Moves Forward with Dumb Plan to Tax ‘Big Tech’ To Pad The Pockets of Big Telecom” (13 September 2022), online: www.techdirt.com/2022/09/13/europe-moves-forward-with-dumb-plan-to-tax-big-tech-to-pad-the-pockets-of-big-telecom.

201 See supra note 23.

202 Ibid.

203 See Kim Brooks, “Canada’s Evolving Tax Treaty Policy toward Low-Income Countries” in Arthur J Cockfield, ed, Globalization and Its Tax Discontents: Tax Policy and International Investments: Essays in Honour of Alex Easson (University of Toronto Press, 2010) 189 at 191, DOI: https://doi.org/10.3138/9781442660021-011.

204 See Veronika Daurer, “Tax Treaties and Developing Countries” (2014) 42 Intertax 695, DOI: https://doi.org/10.54648/taxi2014062; Wim Wijnen & Jan de Goede, “The UN Model in Practice 1997-2013” (2014) 68 BFIT 118, DOI: https://doi.org/10.59403/1r99e4n; Patricia Brown, “How Hard Can This Be? The Dearth of U.S. Tax Treaties with Latin America” (2020) 74 U Miami L Rev 359.

205 In 2018, the United Kingdom’s opposition Labour Party challenged the fairness of a newly agreed tax treaty between the country and Lesotho that was introduced to Parliament for ratification. See Anneliese Dodds & Kate Osamor, “Dodds and Osamor: We will fight Tory Attempts to Wave through Tax Treaties while Neglecting the World’s Poorest People” (18 January 2018), online: labourlist.org/2018/01/dodds-and-osamor-we-will-fight-tory-attempts-to-wave-through-tax-treaties-while-neglecting-the-worlds-poorest-people [perma.cc/C8DD-FNEM]. According to the policy statement released by party leadership:

Lesotho is one of the world’s poorest countries. The public services supporting its two million people are severely underfunded. Some 25 per cent of people of working age are infected with HIV/AIDS. Britain is Lesotho’s largest individual contributor of foreign direct investment at $17M: barely notable for Britain, but equivalent to half of Lesotho’s spending commitments in 2018. Anything Britain does to affect Lesotho’s ability to collect tax has enormous consequence for the future of the country.

The treaty Labour examined forces down the amount of tax that Lesotho can collect from British companies and multinationals. It will also require the country to settle any tax disputes using secret international courts, which have been found to work against the interests of developing countries (ibid).

See also Jon Date, “Four Questions MPs Must Ask in Parliament Today About the UK-Lesotho Tax Treaty,” Huffington Post (10 January 2018), online: www.huffingtonpost.co.uk/entry/uk-lesotho_uk_5a54982be4b0f9b24bf31a7d [perma.cc/HA3B-Q3N3].

206 See Yariv Brauner, “An International Tax Regime in Crystallization” (2003) 56 Tax L Rev 259, DOI: https://doi.org/10.17310/ntj.2003.1S.07; Brooks & Krever, supra note 18; Hearson, “Developing Countries,” supra note 19; Catherine Ngina Mutava, “Review of Tax Treaty Practices and Policy Framework in Africa” (2019) International Centre for Tax and Development, Working Paper No 102.

207 See R Alan Short, “Tax Treaties with Developing Countries” (1966) 14 Can Tax J 171.

208 See Jacques Morisset & Neda Pirnia, “How Tax Policy and Incentives Affect Foreign Direct Investment: A Review” (2000) World Bank Group, Working Paper No 2509, DOI: https://doi.org/10.1596/1813-9450-2509; Louis T Wells Jr et al, Using Tax Incentives to Compete for Foreign Investment: Are They Worth the Costs? (World Bank, 2001), DOI: https://doi.org/10.1596/0-8213-4992-9; Dagan, “Tax Treaties Myth,” supra note 188; Neumayer, supra note 185; Hearson, “Developing Countries,” supra note 19. As noted above, there have been improvements in more recent tax treaties concluded between high-income countries and low-income countries. Several low-income countries have also canceled tax treaties that erode their tax base. See LEX Africa, “The Bonfire of the Tax Treaties” (28 July 2020), online: lexafrica.com/2020/07/the-bonfire-of-the-tax-treaties [perma.cc/Q45X-NCAV]; Will Fitzgibbon, “Senegal Nixes ‘Unbalanced’ Tax Treaty with Mauritius” (26 May 2020), online: International Consortium of Investigative Journalists www.icij.org/investigations/mauritius-leaks/senegal-nixes-unbalanced-tax-treaty-with-mauritius [perma.cc/PKL9-6ZKA]. Further, some low-income countries (e.g., Nigeria and Kenya) have resisted pressure to accept the OECD Two-Pillar tax deal, which would reallocate taxing rights in respect of the digital economy. See Carlos Mureithi, “Why Kenya and Nigeria Haven’t Agreed to a Historic Global Corporate Tax Deal,” Quartz (2 November 2021) online: qz.com/africa/2082754/why-kenya-and-nigeria-havent-agreed-to-global-corporate-tax-deal [perma.cc/ER3K-NT93]; Johannes Oluwatobi, “Nigeria is not in Hurry to Sign OECD Corporate Tax Agreement — FIRS” (30 November 2021), online: prnigeria.com/2021/11/30/nigeria-hurry-sign-oecd [perma.cc/Q7FK-DBYP]. Even some low-income countries that endorsed the deal have refused to accept aspects of the deal that would unduly fetter their taxing rights in the future. See FE Bureau, “India, Others Oppose OECD Plan on Future Digital Taxes” (19 August 2022), online: www.financialexpress.com/policy/economy-india-others-oppose-oecd-plan-on-future-digital-taxes-2635574 [perma.cc/SB4B-T9FN].