Symposium: The Future of International Tax Disputes

ITL has become one of the fastest evolving areas of PIL. Disagreements in ITL are being viewed not only from a tax but also a trade and investment lens. The articles in this special issue address the interactions between tax, investment and trade law in the development of international tax rules to deal with cross-border transactions. Some of the articles in this special issue look at the future, by addressing the challenges that countries face when introducing rules to ensure fair taxation of multinational enterprises (MNEs) and the consequences of the (October 2021) adoption of the Pillar 1 and Pillar 2 proposals by most of the countries participating in the BEPS Inclusive Framework.
In ‘The Settlement of Tax Disputes by WTO’, Luca Rubini analyses the relationship between tax law, which is typically a domestic matter, and trade laws, particularly those codified in the WTO, which have an international scope. The article provides a
brief overview of the regulatory framework applicable to tax measures. Further the article examines the various tax concerns that have arisen and may arise in ‘tax and trade’ disputes. At last, the interaction between subsidy disciplines with tax measures
and interpretation of the national treatment carve-out for producer subsidies under Article III:8(a) of the GATT is studied. In ‘Investor-State Dispute Settlement and Tax Matters: Limitations on State’s Sovereign Right to Tax’, Prabhash Ranjan analyses the
tax-related investment disputes. Further the paper focuses on the interpretation of the carve-out provision for taxation matters in tax-based ISDS claims, which enables the tribunals to decide on the jurisdiction of the matter. The paper closes by outlining some
key principles including bona fide taxation measures that states should consider as they evaluate international tax reforms together. In ‘Issues and challenges with applying  investment agreements to tax matters in the context of India’s experience’, Suranjali
Tandon takes the Indian case of retroactive tax legislation to demonstrate how tax policy may be constrained by the rights afforded to the foreign investor that are superior to those guaranteed under international tax and domestic law. Further, the paper reflects
on whether the exclusion of tax-related disputes explicitly from investment agreements may not be enough. In ‘Proportionality and the fight against international tax abuse: comparative analysis of judicial review in EU, international investment and WTO law’, Tony
Marzal and Ricardo Garcia Anton explain that the tax abuse by multinationals has become a major concern of states in the last ten years. States have a valid claim to resist abusive practices and to enforce tax equity, however taxpayers have often raised
objection to this broad power of the tax authorities with the legal certainty principle. In such cases the international courts apply the principle of proportionality – i.e. if the anti-tax avoidance measures do not go beyond the state’s proper ‘territorial’ borders
and are consistent with certain ‘good governance’ norms. Finally, in ‘The OECD International Tax Dispute Settlement Proposals: Moving to the Privatization of International Tax Disputes?’, Howard Mann explains the less discussed proposals of dispute settlement contained in the October 2020 OECD report, Tax Challenges Arising from Digitalisation – Report on Pillar 1 Blueprint: Inclusive Framework on BEPS. This essay mainly relies on previous experiences with international arbitration in the context of investor-state dispute settlement. The paper focuses on the interpretation of the carve-out provision for taxation
matters in tax-based ISDS claims, which enables the tribunals to decide on the jurisdiction of the matter. However, it is a well-established principle that any changes in the legal framework through taxes must be reasonable and appropriate to the public welfare. The host states, while exercising their sovereign right to tax should adopt bona fide taxation measures.