Tax Competition and the Ethics of Burden Sharing

41 Pages Posted: 24 Sep 2018 Last revised: 12 Mar 2021

See all articles by Ivan Ozai

Ivan Ozai

Osgoode Hall Law School, York University

Date Written: August 30, 2018


Tax scholars have long suggested that tax competition should be mitigated because it reduces the collective revenues of countries, impairs their ability to redistribute wealth, and produces more regressive tax systems. Likewise, international organizations such as the OECD and the European Union increasingly move towards designing a global framework aimed at reducing tax avoidance and mitigating tax competition.

However, there is no comprehensive discussion on the costs that would arise from institutional reform designed to tackle tax competition. To the extent that any change in the international tax order will benefit some countries but also harm others, an ethical analysis of tax competition should include an examination of how to distribute the losses resulting from overall institutional reform. As international policy decisions tend to reproduce the present imbalance of the global power, the lack of an explicit discussion on how to share the costs arising from an institutional change might result in countries with less negotiating power bearing most of these costs.

This Article introduces the costs side of curbing tax competition and offers four normative principles that can help illuminate how the burdens of reforming the current international tax regime should be shared among countries.

Keywords: tax competition, cost-side analysis, burden sharing, fairness, developing countries, global justice, CBDR

JEL Classification: H26, H77, K34, F23, F42, F53, F55, H87, K33, K34, O19

Suggested Citation

Ozai, Ivan, Tax Competition and the Ethics of Burden Sharing (August 30, 2018). 42:1 Fordham International Law Journal (2018), pp. 61-100, Available at SSRN:

Ivan Ozai (Contact Author)

Osgoode Hall Law School, York University ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3


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