Stanley Surrey, The 1981 US Model, and the Single Tax Principle

18 Pages Posted: 1 Apr 2021 Last revised: 1 May 2021

See all articles by Reuven S. Avi-Yonah

Reuven S. Avi-Yonah

University of Michigan Law School

Gianluca Mazzoni

University of Michigan at Ann Arbor - Law School

Date Written: March 31, 2021


2021 marks the 40th anniversary of the 1981 U.S. Model Tax Treaty as well as the 5th anniversary of the 2016 US Model Tax Treaty. The first author has repeatedly argued that the 1981 Model gave life to the single tax principle (“STP”). The 2016 Model updates effectively implemented the principle that cross-border income should be taxed once – that is not more and but also not less than once. For example, the 2016 Model does not reduce withholding taxes on payments of highly mobile income that are made to related persons that enjoy low or no taxation with respect to that income under a preferential tax regime. The aim of this article is to identify with relative certainty the origins of the STP. The purpose is to give a systematic and historical interpretation of the STP by looking at the context during which it was purportedly founded. This article draws extensively on published and unpublished writings of the main architect of US international tax rules, Stanley Surrey, and is the result of archival research conducted at the Historical & Special Collections of Harvard Law School Library. The aim of this article is to show that the origins of the STP, from the perspective of the United States as a source country, can be traced to the eight-year period from 1961 to 1969 when Surrey, a Harvard law professor (1950-1984) became the first US Assistant Secretary of the Treasury for Tax Policy. As far as tax treaties are concerned, Surrey made two major contributions to applying the STP in practice. First, the tax treaties negotiated by Surrey: (i) the Luxembourg-United States Income and Capital Tax Treaty (1962), (ii) the 1963 protocol to the treaty with the Netherlands applicable to the Netherlands Antilles, and (iii) the Canada-United States Income Tax Treaty (1966) took pains to enforce source-based taxation in cases where there was no residence-based taxation of passive income. Second, it was during Surrey’s time at the US Treasury Department that the US delegation wrote two notes to the OECD Fiscal Committee recommending the establishment of a new Working Group which would address the problem of Tax Avoidance through the Improper Use or Abuse of Tax Conventions. This article discusses Surrey’s contributions to the practical implementation of the STP.

Keywords: Single tax principle, US model tax treaty, Staley Surrey

JEL Classification: H26

Suggested Citation

Avi-Yonah, Reuven S. and Mazzoni, Gianluca, Stanley Surrey, The 1981 US Model, and the Single Tax Principle (March 31, 2021). U of Michigan Law & Econ Research Paper No. 21-013, Available at SSRN: or

Reuven S. Avi-Yonah (Contact Author)

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States
734-647-4033 (Phone)

Gianluca Mazzoni

University of Michigan at Ann Arbor - Law School ( email )

Ann Arbor, MI
United States

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