Are the Imposed Principles Standard? A Review of Imposing Standards: The North-South Dimension to Global Tax Politics by Martin Hearson

Abstract

The publication of Martin Hearson’s book, Imposing Standards: The North-South Dimension to Global Tax Politics, coincided with heated international discussions of the most substantial policy proposals in the field of international taxation in the last century. Hearson’s work provides insights on how the developed countries exerted control over the negotiations of the double taxation agreement (DTA) regime, which is the basis of the current international taxation framework. It explains how the negotiations resulted in a framework that works well for the developed countries but does not substantially address the tax revenue needs of the developing countries. The publication of the book is timely because some of the same tensions that underlie those DTA negotiations also underlie the current policy proposals on the tax consequences of the digitalized economy. Hearson’s work will undoubtedly facilitate critical review of the recent international policy debates around the appropriate means of ensuring taxation of profits resulting from the digitalized economy. This book review weaves the issues examined by Hearson into three distinct but related strands and examines them within the context of the ongoing negotiations of the Two Pillar.

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Keywords: International Taxation, Organization for Economic Cooperation and Development, Double Taxation Agreements, Base Erosion and Profit Shifting, Digitalized Economy, Two-Pillar Solution

JEL Classification: K33, K34, P33, F23, F53