The Conflictual Core of Global Tax Cooperation

It is widely argued that the world is in a new era of global tax cooperation, evidenced by the multilateral OECD/G20 project on base erosion and profit shifting (BEPS). This article argues, however, that this cooperation-centric account masks fundamental conflicts between developing and developed countries, which recently culminated in a vote to shift reform work to the United Nations. This article contends that developing country-centered criticisms of the project are not random but instead reflect coherent concerns about the wide historical gulf in power and resources between developing and developed countries and how the BEPS reforms ignore, and may even exacerbate, that gulf. The reform’s defenders have largely missed this fundamental crux of the criticisms, focusing primarily on the project’s incremental short-term benefits for inter-developing country tax competition. This article’s framework for analysing global tax reform incorporates these deep conflicts and thus more accurately assesses the reform’s promise and risks.