International Tax Reform: Who Gets a Seat at the Table?

58 Pages Posted: 31 Aug 2022 Last revised: 3 Jul 2023

See all articles by Assaf Harpaz

Assaf Harpaz

Drexel University Thomas R. Kline School of Law

Date Written: July 3, 2023


The international tax framework relies on early-twentieth-century
principles and favors the interests of the Global North,
which created it. It bases taxing rights on a corporation’s physical
presence and mostly allocates profits to the country of residence.
Moreover, it has been slow to adapt to modern business practices.
In the digital economy, companies shift profits with relative ease
and often do not require a physical presence in the location of their
consumers. International taxation needs reform, but leading
proposals do not reflect meaningful input from the Global South and
are unlikely to serve the needs of developing countries.

In 2021, the Organisation for Economic Co-operation and
Development (OECD), known informally as the “World Tax
Organization,” introduced new rules for the cross-border taxation of
multinational enterprises. The new rules intend to address the tax
challenges of digitalization and profit-shifting, and they are likely
the most significant change to international taxation in several
decades. However, the OECD does not represent the interests of
developing economies, and the proposed reform has not remedied
the historic imbalance which disfavors the Global South.

This Article highlights the shortcomings of the OECD’s
multilateral efforts in the context of taxation and digitalization. It
analyzes the political lawmaking of the OECD and presents the new
rules as a compromise that fails to address inequities in cross-border
taxation. The Article argues that the reform undermines tax
sovereignty and that the current international tax regime overlooks
the involvement of the world’s developing countries. It asserts that
attempts to promote inclusivity within the OECD have largely been
expressive and that the international tax framework inherently
disadvantages developing countries and their interests. The Article
proposes steps to promote the equal-footed participation of
developing countries in future international tax policy initiatives.
First, it recommends expanding voting rights for non-members
within the OECD. Second, it supports the creation of a new
intergovernmental framework within the United Nations that is
better positioned to revisit traditional international tax norms
through a genuinely inclusive process.

Keywords: tax, taxation, international, OECD, BEPS, UN, United Nations, digital, economy, technology, Sovereignty, Multilateral, Multinational, Corporate, Amazon, Facebook, Google, Apple, Digital Services Tax, DST, Profit, Shifting, Developing, Competition

JEL Classification: K1, K34, K37, H26

Suggested Citation

Harpaz, Assaf, International Tax Reform: Who Gets a Seat at the Table? (July 3, 2023). University of Pennsylvania Journal of International Law, Available at SSRN: or

Assaf Harpaz (Contact Author)

Drexel University Thomas R. Kline School of Law ( email )

3320 Market Street
Philadelphia, PA 19104
United States

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