From Aiken to AI: Evolution and Innovation in Combatting Treaty Shopping and Tax Avoidance in International Tax Law

This study examines the persistent challenges of tax treaty shopping and tax avoidance in international tax law. It focuses on the evolution of anti-abuse mechanisms and explores the potential of artificial intelligence (AI) in this context. Using the Aiken Industries case (1971) as a foundation, it analyses the interplay between legal certainty and interpretive flexibility in addressing abuse in tax treaty application. Building on this foundation, the study considers how AI may assist in addressing existing limitations by enhancing the interpretation and application of anti-abuse measures, thereby supporting their further development. At the same time, it examines the challenges associated with the use of AI in tax administration, including transparency, explainability and regulatory compliance. Adopting a functional and comparative approach, the study examines both the potential and limitations of existing anti-abuse mechanisms and the potential and risks of integrating AI into their application.