THE CONFLICTUAL CORE OF GLOBAL TAX COOPERATION

Abstract

It is widely argued that the world is in a new and distinctive era of global tax cooperation, as evidenced by the launch of a sweeping multilateral tax reform project spearheaded by the OECD and G20 to confront tax base erosion and profit shifting ("BEPS"). This Article argues, however, that this cooperation-centric account is overstated and masks fundamental conflicts between developing and developed countries' interests, conflicts that have recently culminated in a vote to shift the location of the reform work to the United Nations. This Article also argues that these conflicts constitute more than a random mélange of objections from losing parties in negotiations but instead reflect a coherent and unified set of developing country-centered concerns that extend far beyond tax policymaking. This Article's highlights the conflictual elements inherent in the OECD/G20 BEPS project and presents an interpretative framework through which developing country-centered criticisms and their likely implications can be analyzed and understood. Fundamentally, these criticisms reflect concerns about the wide historical gulf in power and resources between developing and developed countries and how the BEPS reforms fail to address, and may even exacerbate, that gulf. Meanwhile, defenders of the BEPS reforms have largely missed this crux of the criticisms, focusing instead on the project's incremental short-term benefits for inter-developing country tax competition. Our interpretation of these deep conflicts at the heart of contemporary global tax reform has important implications for accurately describing the state of asserted global tax cooperation and for appreciating both its promise and its risks.