Breaking BEPS: The New International Tax Diplomacy

This draft has been published as 'The New International Tax Diplomacy,' 104 Geo. L.J. 1137-1196 (2016)

55 Pages Posted: 30 Aug 2015 Last revised: 1 Jul 2017

See all articles by Itai Grinberg

Itai Grinberg

Georgetown University Law Center

Date Written: September 15, 2015


International tax avoidance by multinational corporations is now front-page news. In a time of public austerity, citizens and legislators around the world have focused on the erosion of the corporate income tax base. In response, in 2012 the G-20 — the gathering of the leaders of the world’s twenty largest economies — launched the “Base Erosion and Profit Shifting” (BEPS) project, the most extensive attempt to change international tax norms since the 1920s.

This article is the first to explain that in the course of the BEPS project, the field of international tax has adopted the institutional and procedural architecture for multilateral action used in international financial law. But will that architecture work in the international tax context? To answer that question, the article applies lessons from the international financial law literature to assess international tax agreements that are now being reached through soft law instruments and procedures comparable to those that characterize international financial law. This initial analysis is largely pessimistic. However, the article then describes how model tax treaty law — although also a form of soft law — is highly effective, and differentiates the political economy of international tax law from that of international financial law. As a result, a key theoretical point emerges: bifurcating analysis of multilateral efforts to change international tax norms into their Model Treaty–based and non-Model Treaty–based components is necessary in order to understand the new regime for international tax governance. At a more practical level, bifurcating the analysis highlights that observers should expect the Model Treaty–based parts of the BEPS project to be implemented, as well as most parts of the project focused on tax transparency. By contrast, sustained international coordination in implementing other dimensions of the project is doubtful. In reaching these conclusions, the Article contributes to the broader international economic governance literature by using a high-profile example from international tax diplomacy to show how underlying legal institutions affect the prospects for implementation of international regulatory agreements.

Keywords: tax, international economic law, tax avoidance, multinational corporations, economic governance, OECD, tax treaties

JEL Classification: K33, K34

Suggested Citation

Grinberg, Itai, Breaking BEPS: The New International Tax Diplomacy (September 15, 2015). This draft has been published as 'The New International Tax Diplomacy,' 104 Geo. L.J. 1137-1196 (2016), Available at SSRN: or

Itai Grinberg (Contact Author)

Georgetown University Law Center ( email )

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Washington, DC 20001
United States
202-661-6615 (Phone)

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