Tax Discrimination and Capital Neutrality

World Tax Journal, Forthcoming

21 Pages Posted: 2 Dec 2008 Last revised: 27 Feb 2013

See all articles by Ruth Mason

Ruth Mason

University of Virginia School of Law

Multiple version iconThere are 2 versions of this paper

Date Written: December 1, 2008


"Tax discrimination" is an increasingly important legal concept for international trade and cross-border investment. Commentators have observed that the nondiscrimination article found in thousands of tax treaties based on the OECD Model lacks a coherent guiding principle, and in my remarks, I will argue that the explanation for the incoherence of the nondiscrimination article lies in fundamental uncertainty regarding the purpose and function of tax treaties. Furthermore, I am skeptical of recent suggestions from international tax policymakers that the tax treaty nondiscrimination principle should be brought in line the European Union conception of discrimination. Instead, I would urge you as OECD member state representatives to conduct a more fundamental reconsideration of the goals of tax treaties and what those goals mean for the nondiscrimination article. As requested, I will dedicate part of my remarks to describing my understanding of how various legal prohibitions on tax nondiscrimination relate to the familiar international tax neutrality benchmarks of capital import neutrality (CIN) and capital export neutrality (CEN).

Keywords: tax discrimination, nondiscrimination, tax treaty, EC treaty, taxation, OECD, capital export neutrality, capital import neutrality, protectionist taxes, exit taxes

JEL Classification: H24, H25

Suggested Citation

Mason, Ruth, Tax Discrimination and Capital Neutrality (December 1, 2008). World Tax Journal, Forthcoming, Available at SSRN:

Ruth Mason (Contact Author)

University of Virginia School of Law ( email )

United States

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