Flexible Multi-Tier Dispute Resolution in International Tax Disputes by Pistone Pasquale;de Jan J. P.;

Author:Pistone, Pasquale;de, Jan J. P.;
Language: eng
Format: epub
Publisher: IBFD Publications USA, Incorporated
Published: 2020-08-15T00:00:00+00:00

14.1.3. “Big happy family”

But here comes in an inconvenient truth for authorities: the fiction that authorities would be convivial colleagues to each other – one “big happy family”. In reality, and more often than not in these present days of global spread of the tax treaties network, there may be severe misunderstanding, controversy or non-communication, due to differences in culture, or inequalities in expertise or political or economic power. And then, why should authorities behave like they were colleagues anyway? International taxation is a zero sum game and authorities are each other’s competitors for tax revenue, or for investments yielding taxable income. The assumption of a large reserve of profits of multinational enterprises presently escaping from taxation, that underlies the OECD/G20 BEPS Project, may suggest there would still be plenty to tax left for every country. But it is those low or non-taxed profits – outlawed, so they seem – that are the ones authorities contest most hotly, and at the end of the day are most likely to suffer double or even multiple taxation.

Authorities, the OECD included, have a habit of putting up a brave face and pretend their world would be carefree of any such relational problems. Strikingly, the OECD Model does not even use the term “dispute” and the OECD Commentary hardly – as if disputes would not exist! But, again, as any mediator will confirm, disputes are daily bread and butter, and relational issues a common cause of disputes or a common impediment for dispute resolution. There is no reason to believe this would be any different for authorities.

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