FLORIDA TAX REVIEW


 

FLORIDA TAX REVIEW 
Volume 15 2014 Number 2 

 

THE UNRULY WORLD OF TAX: 

A PROPOSAL FOR AN INTERNATIONAL TAX COOPERATION FORUM 

 

by

 
H. David Rosenbloom

*
 

Noam Noked
**

 

Mohamed S. Helal
***

 

 

 

ABSTRACT 

 

International cooperation in tax policy is deeply 

fractured. Inconsistencies, loopholes, and ineffective 

mechanisms—which could be avoided if real collaboration 

among countries existed—have created significant 

inefficiency losses for decades. This Article focuses on the 

institutional infrastructure underlying international 

cooperation in tax issues and argues that the current forums 

in which such cooperation is encouraged do not provide an 

adequate platform in which countries with similar interests 

can effectively make a collaborative effort. To facilitate 

cooperation, this Article proposes to create a new institution 

currently missing from the international tax policy-setting 

arena: an informal forum for coordination among countries 

that share similar interests in tax policy, inspired by the 

model of “Like Minded Groups” in international 

organizations. This forum will enable countries that share 

similar interests to cooperate and reach understandings 

about necessary policy adaptations. We identify two major 

projects that this forum could promote—efforts to curtail tax 

evasion and efforts to harmonize various aspects of tax 

policy. We argue that this model might have significant 

                                                 
*Member, Caplin & Drysdale, Chartered, Washington, D.C.; Director of the 

International Tax Program, New York University School of Law. 

**Terence M. Considine Fellow in Law and Economics; Fellow of the 

Program on Corporate Governance; Candidate for S.J.D., Harvard Law School. 

***Teaching Fellow, John F. Kennedy School of Government; Candidate 

for S.J.D., Harvard Law School. 



58 Florida Tax Review                   [Vol. 15:2 

 

advantages in promoting cooperation, reducing the 

“competitiveness” threat, advocating coordinated policies, 

and overcoming external and domestic pressures. In light of 

the current challenges in the field of tax policy, and the 

difficulties in forming international cooperation within the 

current institutional framework, the proposed model is 

worth serious discussion and consideration. 

 

 

I. INTRODUCTION  .............................................................................  58 

II. CURRENT INTERNATIONAL TAX POLICY FORUMS ...................... 61 

A.         The OECD ........................................................................... 61 

 B.         G20 ...................................................................................... 66 

 C.         Other Forums ...................................................................... 69 

III. PROPOSAL: TAX COOPERATION FORUM ...................................... 77 

A. Applying the “Like-Minded Group” Model to Tax  

              Policy Setting ...................................................................... 77 

 B.         Where Can the TCF Make a Difference? ............................ 83  

 C.           Rationale and Advantages ................................................... 85 

IV. CONCLUSION ................................................................................... 87 

 

 

I. INTRODUCTION 

 

International cooperation in the making of tax policy is inadequate. 

Inconsistencies, loopholes, and ineffective mechanisms—which could be 

avoided if real collaboration between countries existed—have created 

significant inefficiency losses for decades. There are various reforms that 

might be suggested to improve existing mechanisms of global tax 

governance, but in this Article we focus on the institutional infrastructure 

underlying international cooperation on tax issues. We argue that the current 

forums in which international tax cooperation is intended to occur do not 

provide an adequate platform for countries with similar interests to engage in 

a true collaborative effort.   

We propose a new institution currently missing from the 

international tax policy-setting arena: an informal forum for coordination 

between countries sharing similar interests. This forum would enable such 

countries that share similar interests to cooperate and reach understandings 

about necessary policy changes. The proposal is inspired by the model of 

“Like Minded Groups,” widely practiced in international organizations, 

where states whose interests converge establish a group to coordinate 

policies and create a negotiating bloc enabling them to achieve greater gains 



2014]    The Unruly World of Tax       59 

in negotiations with other parties. This Article emphasizes the maximization 

of national welfare, but it is possible that the cooperation envisioned would 

increase worldwide welfare as well. 

Current international institutions and forums specializing in the field 

of international taxation do not provide an effective platform for cooperation. 

The Organisation for Economic Cooperation and Development [hereinafter 

“OECD”], which is based on consensual decision-making, consists of 

countries with divergent and, in some cases, conflicting interests, which 

limits the ability of the organization to make progress on contentious issues 

and achieve significant changes to the status quo. The G20, a forum for 

heads of state with differing interests and no institutional support, cannot 

permanently play the role of initiator and leader of international tax policy 

changes. Additionally, the other bodies discussed in this Article do not 

effectively facilitate cooperation in tax policy matters.  

We call our proposed institution the “Tax Cooperation Forum” 

[hereinafter “TCF”]. Different groups of countries can form different TCFs 

to promote their shared interests. One group of countries with similar tax 

interests that might establish such a forum could be the United States, the 

United Kingdom, Germany, France, Japan, and a few other developed 

countries that share similar interests. The TCF would be informal in nature 

and without any legal authority over members. This would allow members to 

opt in or out of the discussions in accordance with the policies under 

consideration and create ad hoc coalitions. As we explain further below, the 

use of an informal body would reduce political pressure and sensitivities 

regarding the inclusion or exclusion of different countries. 

If the changes agreed upon in a TCF only required actions by the 

member countries, no further international cooperation would be needed, and 

the countries in the TCF would adopt the changes through domestic laws, or 

encourage their adoption in bilateral or multilateral agreements. If the 

changes affected other parties or needed the cooperation of other countries, 

the TCF could submit the proposed changes to the OECD (and possibly to 

the G20 or the WTO for issues that affect trade), in order to allow 

negotiation and the formation of a broader consensus. The TCF may indicate 

where its core principles are non-negotiable and where there is room for 

concessions in order to obtain broader acceptance by non-TCF states. If a 

broad consensus is not achieved, the TCF countries would adopt the 

proposed changes (though some might opt not to do so) and may set other 

mechanisms to incentivize cooperation and mitigate problems with lack of 

cooperation between other parties.   

What kind of tax issues could be on the agenda of such a group or 

could be addressed differently if this forum existed? At least two major 

projects could be promoted by the TCF—efforts to curtail tax evasion and to 



60 Florida Tax Review                   [Vol. 15:2 

 

harmonize different aspects of tax policy. There may be measures to fight tax 

evasion that are not being taken now due to the lack of cooperation among 

countries.
1
 The implementation of automatic information exchange by the 

United States, which is inconsistent with the adoption of anonymous cross-

border tax withholding in the UK-Swiss Confederation Taxation Cooperation 

Agreement, makes one wonder whether a different outcome would have 

resulted if these countries had first attempted collaboration on this matter.
2
 

The TCF could also promote multilateral harmonization efforts. 

Many commentators have suggested ideas for improving international tax 

policy, but these ideas must be adopted multilaterally: a multilateral tax 

treaty;
3
 formulaic apportionment system

4
 and reforms in the current transfer 

pricing rules;
5
 standardization of anti-avoidance rules, such as the rules 

regarding CFCs;
6
 uniform minimal tax rate on capital income;

7
 coordinated 

policy regarding taxation of intellectual property,
8
 and so on. Other, more 

modest initiatives that would be beneficial include harmonization of 

reporting rules so as to make compliance less costly for taxpayers; 

                                                 
1. See infra  note 29.   

2. See Itai Grinberg, Taxing Capital Income in Emerging Countries: Will 

FATCA Open the Door? Georgetown Public Law Research Paper No. 13-031, 

(2013), http://scholarship.law.georgetown.edu/facpub/1227/ [hereinafter Grinberg, 

Capital Income in Emerging Countries].  

3. See Victor Thuronyi, International Tax Cooperation and a Multilateral 

Treaty, 26 BROOK. J. INT’L L. 1641 (2001) [hereinafter Thuronyi, International Tax 

Cooperation]. 

4. See Kimberly A. Clausing & Reuven S. Avi-Yonah, Reforming Taxation 

in a Global Economy: A Proposal to Adopt Formulary Apportionment, The 

Hamilton Project, Policy Brief No. 2007-08 (2007) [hereinafter Clausing & Avi-

Yonah, Reforming Taxation] (discussing one proposal for a formulaic 

apportionment), http://www.brookings.edu/~/media/research/files/paper/2007/6/corp 

oratetaxes%20clausing/200706clausing_aviyonah_pb.pdf.  

5. David Spencer, Transfer Pricing: Will the OECD Adjust to Reality?, J. 

INT’L TAX’N 35 (2012) [hereinafter Spencer, Transfer Pricing]. 

6. See Chloe A. Burnett, Replacing CFC Regimes with a Collective 

Attribution System, 38 TAX NOTES INT’L 1109 (2005) [hereinafter Burnett, CFC 

Regimes]. 

7. See Peter Birch Sørensen, The Case for International Tax Coordination 

Reconsidered, 15:31 ECONOMIC POLICY 429 (2000) (analyzing the harmonization of 

tax rates on capital income) [hereinafter Sørensen, The Case for Coordination]. 

8. See Michael J. Graetz & Rachael Doud, Technological Innovation, 

International Competition, and the Challenges of International Income Taxation, 

113 COLUM. L. REV. 347 (2013) (discussing coordination of intellectual property 

taxation and its policy alternatives) [hereinafter Graetz & Doud, Technological 

Innovation].  



2014]    The Unruly World of Tax       61 

standardizing source and transfer pricing rules; improving mechanisms for 

dispute resolution and administrative cooperation, and other initiatives that 

would improve efficiency. 

What would be the advantages of the TCF? First, cooperation among 

countries that share similar interests is beneficial because it reduces the 

“competitiveness” threat—a fear that investors will withdraw or that 

domestic companies will be unable to compete against foreign companies. 

Second, cooperation among influential countries may be utilized to further 

tax policies and achieve consensus, and in the event consensus is not 

possible, to set a coordinated policy that may be preferable to either the 

status quo or acting unilaterally. Third, this proposed model would permit 

different groups of states that share similar interests to set their own tax 

policy agenda and cooperate on issues that may not have broad interest. 

Fourth, cooperation within a group of countries may help policymakers 

overcome domestic political pressures and lobbies against policy changes. 

Fifth, the proposed model is practical, feasible, and within the current 

framework of international institutions. 

The structure of this Article is as follows: Part II discusses the 

current international tax organizations and demonstrates how they fail to 

foster cooperation efficiently. Part III discusses the proposed model for 

international tax policy leadership. Part IV offers concluding remarks. 

 

II. CURRENT INTERNATIONAL TAX POLICY ORGANIZATIONS 

 

Assume that a group of countries sharing similar interests seek to 

collaborate on tax policy matters. What current international forum could 

facilitate such cooperation? What difficulties would this forum likely 

encounter? 

 

A. The OECD 

 

The OECD claims to have performed a central role in developing 

and promoting tax policies that are implemented globally,
9
 a contention that 

is accepted by several commentators.
10

 The most successful OECD standard-

                                                 
9. See, e.g., Organisation for Economic Co-operation and Development, 

CURRENT TAX AGENDA 9 (2012), http://www.oecd.org/ctp/OECDCurrentTax 

Agenda2012.pdf, [hereinafter OECD TAX AGENDA]. 

10. Jan Wouters & Karien Meuwissen, Global Tax Governance: Work in 

Progress?, Leuven Center for Global Governance Studies, Working Paper No. 59, 

(2011) [hereinafter Wouters & Meuwissen, Global Tax Governance], http://papers. 

ssrn.com/sol3/papers.cfm?abstract_id=1766436; Allison Christians, Taxation in a 



62 Florida Tax Review                   [Vol. 15:2 

 

setting instrument in the field of tax policy is the OECD Model Tax 

Convention on Income and on Capital, which essentially provided the 

foundation for over 1,500 current bilateral tax treaties.
11

 Another similarly 

successful example of OECD standard-setting are the 1995 Transfer Pricing 

Guidelines, which have been used as the basis for legislation in participating 

OECD countries and an increasing number of non-OECD countries. The 

OECD also took the lead in developing the widely adopted standards 

regarding e-commerce.
12

 The OECD Guidelines for Multinational 

Enterprises (2008, updated 2011) include a chapter on taxation, in which the 

OECD outlines the proper standard of behavior in the field of tax.
13

 

However, the OECD has faced setbacks in its efforts to achieve 

greater coordination among its members in the area of tax policy. For 

example, some observers have noted that by 2006 the OECD’s Harmful Tax 

Competition Agenda, originating from a 1998 OECD report, had largely 

failed in achieving its objective of combating the role of offshore countries in 

international tax avoidance and evasion.
14

 Other commentators, such as 

Professor Avi-Yonah of the University of Michigan College of Law, contend 

the OECD agenda has had limited success.
15

 Overall, OECD activities in the 

field of tax policy are based on the principle of fiscal sovereignty, which 

favors enhancing cooperation rather than tax harmonization among member 

states.
16

 

                                                                                                                   
Time of Crisis: Policy Leadership from the OECD to the G-20, 5 NW. J. L. & SOC. 

POL’Y 19, 19–40 (2010) [hereinafter Christians, Taxation in a Time of Crisis]; Yariv 

Brauner, An International Tax Regime in Crystallization, 56 TAX L. REV. 259 (2003) 

[hereinafter Brauner, Tax Regime in Crystallization]; Arthur J. Cockfield, The Rise 

of the OECD as Informal “World Taxation Organization” Through National 

Responses to E-Commerce Tax Challenges, 8 YALE J.L. & TECH. 136 (2006) 

[hereinafter Cockfield, Rise of the OECD.  

11. See Thuronyi, International Tax Cooperation, supra note 3, at 1641. 

12. See Cockfield, Rise of the OECD, supra note 10, at 136. 

13. Organisation for Economic Co-operation and Development, OECD 

GUIDELINES FOR MULTINATIONAL ENTERPRISES (May 25, 2011), http://www.oecd. 

org/daf/inv/mne/oecdguidelinesformultinationalenterprises.htm. 

14. Richard Eccleston, Peter Carroll & Aynsley Kellow, Handmaiden to the 

G20? The OECD’s Evolving Role in Global Economic Governance, Australian 

Political Studies Association Conference, Working Paper (2010) [hereinafter 

Eccleston etal., Handmaiden to the G20], http://apsa2010.com.au/full-papers/pdf/ 

APSA2010_0228.pdf; Wouters & Meuwissen, Global Tax Governance, supra note 

10, at 12. 

15. Reuven S. Avi-Yonah, The OECD Harmful Tax Competition Report: A 

Retrospective After a Decade, 34 BROOK. J. INT’L L. 783 (2009). 

16. See OECD TAX AGENDA, supra note 9, at 111.  



2014]    The Unruly World of Tax       63 

The recent financial crisis increased international interest, 

particularly among G20 member states, in augmenting government revenues 

by effectively combating tax havens. Implementing G20 decisions in this 

regard is largely dependent on the effectiveness of the OECD.
17

 Indeed, the 

relationship between these two bodies is symbiotic: the G20 elevates some of 

the OECD’s tax policies to the top of the international policy-making 

agenda, while the OECD provides supportive functions for the G20, the latter 

of which lacks the capacity to develop standards or implement and oversee 

its decisions.
18

 

The Global Forum on Transparency and Exchange of Information 

for Tax Purposes [hereinafter “Global Forum”] provides an interesting 

example of this relationship between the OECD and the G20. The Global 

Forum was established in 2001 under the auspices of the OECD to set a 

multilateral framework within which progress in the areas of transparency 

and exchange of information might be made by both OECD and non-OECD 

economies. From its early years, the Global Forum achieved the 

development of standards of transparency and exchange of information 

through the publication of the Model Agreement on Exchange of Information 

for Tax Purposes in 2002 and the publication of a paper setting out the 

standards for the maintenance of accounting records. Additionally, the 

Global Forum has, since 2006, produced annually an assessment of the legal 

and administrative frameworks for transparency and exchange of information 

in over eighty jurisdictions.
19

 

In 2009, the Global Forum was restructured and strengthened as a 

result of the G20’s pressure to implement standards of transparency and 

exchange of information.
20

 The OECD’s tax transparency agenda, adopted 

                                                 
17. See Wouters & Meuwissen, Global Tax Governance, supra note 10, at 

10. See also Christians, Taxation in a Time of Crisis, supra note 10, at 29.  

18. Id. See also Eccleston, Handmaiden to the G20, supra note 14, at 4. The 

paper contends that there are potential benefits to closer coordination between the 

OECD and the G20 on international tax issues: the latter’s high profile support of the 

OECD’s agenda represents a stronger political commitment, thus making it less 

likely that OECD member states will veto the G20’s agenda in the face of domestic 

political pressures. Furthermore, this strong commitment would probably result in 

specific funding to the OECD to support the agenda and fund its implementation and 

enforcement.  

 19. See About the Global Forum, OECD.ORG (August 10, 2013), 

http://www.oecd.ort/document/33/0,3746,en_2151361_4384757_44200609_1_1_1 

_1,00.html.   

20. See Organisation for Economic Co-operation and Development, 

OECD’s Current Tax Agenda, 102–104 (2010), http://www.uscib.org/docs/CTPA_ 

Brochure_June_2010.pdf:  



64 Florida Tax Review                   [Vol. 15:2 

 

through the Global Forum, had little effect prior to the G20’s involvement. 

As of 2006 only eleven Tax Information Exchange Agreements [hereinafter 

“TIE Agreements”] were signed, whereas by 2012 more than 800 TIE 

Agreements were signed.
21

 In order to strengthen the implementation of 

these standards, in 2010, the Global Forum launched a peer review process 

including a review of each jurisdiction’s legal and regulatory framework for 

transparency and the exchange of information for tax purposes and a survey 

concerning the practical implementation of those standards.
22

 This 

demonstrates that while the OECD can set the agenda on issues so long as 

they are not very contentious, it lacks the ability to effectively promote its 

policy proposals, whereas the G20 has been much more effective in 

promoting the OECD’s agenda. However, the G20 depended on the OECD 

to ensure implementation of the agenda and monitor each jurisdiction’s 

compliance with it.
23

 

                                                                                                                   
At its Mexico meeting on 1-2 September 2009, 178 

delegates from over 70 jurisdictions and international 

organizations met to discuss progress made in implementing the 

international standards of transparency and exchange of 

information for tax purposes, and how to respond to the G20 call 

to strengthen the work of the Global Forum. The membership of 

the Global Forum was expanded to include more than 90 

jurisdictions, including all OECD and G20 countries. Its 

governance and financing were restructured to ensure that all 

members participate on an equal footing. They agreed to a three-

year mandate, which includes: carrying out an in-depth monitoring 

and peer review of the implementation of the standards of 

transparency and exchange of information for tax purposes; 

developing multilateral instruments to speed up negotiations; and 

ensuring that developing countries benefit from the new 

environment of transparency. 

21. See Organisation for Economic Co-operation and Development, Global 

Forum on Transparency and Exchange of Information for Tax Purposes: Tax 

Transparency 2012 Report on Progress, 16 (2012), http://www.oecd.org/tax/ 

transparency/Tax%20Transparency%202012_JM%20MB%20corrections%20final.p

df). See also Tax Information Exchange Agreements (TIEAs), OECD.ORG (August 

10, 2013), http://www.oecd.org/tax/exchange-of-tax-information/taxinformation 

exchangeagreementstieas.htm (providing a list of TIE Agreements by date).  

22. See Global Forum on Transparency and Exchange of Information for 

Tax Purposes, Frequently Asked Questions, OECD.ORG (August 10, 2013) 

http://www.oecd.org/dataoecd/35/16/46615395.pdf.  

23. It may be argued that the G20 and the OECD could be tougher in their 

current efforts, as they do not require imposing automatic information exchange or 

closing down tax havens, but only seek “information exchange upon request,” 



2014]    The Unruly World of Tax       65 

The OECD recently presented to the G20 an Action Plan on Base 

Erosion and Profit Shifting [hereinafter “Action Plan”]—a plan to 

reformulate international tax standards in order to reduce tax avoidance 

opportunities for multinational corporations.
24

 The Action Plan identifies 

weaknesses in the current framework and sets a timeline for the development 

of new standards for each recommended plan of action. This is an ambitious 

plan, both with regard to its scope and its goal of achieving consensus on 

many sensitive issues. The OECD notes that “[i]naction in this area would 

likely result in some governments losing corporate tax revenue, the 

emergence of competing sets of international standards, and the replacement 

of the current consensus-based framework by unilateral measures, which 

could lead to global tax chaos marked by the massive re-emergence of 

double taxation. “In fact, if the Action Plan fails to develop effective 

solutions in a timely manner, some countries may be persuaded to take 

unilateral action for protecting their tax base, resulting in avoidable 

uncertainty and unrelieved double taxation. It is therefore critical that 

governments achieve consensus on actions that would deal with the above 

weaknesses.”
25

 

Although it remains the most significant international forum in the 

field of tax policy coordination, the OECD suffers from substantial 

limitations in its efforts to lead international reforms in this field. First, 

OECD decision-making is based on consensus among thirty-four member 

states. Naturally, these countries have different interests, different economic 

characteristics, and different tax systems. As is the case in other multilateral 

forums, OECD decisions and policies tend to reflect the lowest common 

denominator that its members can agree upon. Although it is desirable to 

achieve policy goals by broad acceptance, partial cooperation among some 

members may be better than a stalemate. However, OECD rules of procedure 

do not provide for partial cooperation among these members that share 

similar interests. It is possible that in order to resolve the weaknesses 

identified in the Action Plan through broad consensus, the OECD will have 

to dilute the suggested reforms, thus undermining the goal of this ambitious 

project.   

                                                                                                                   
allowing tax havens to be taken from the OECD’s blacklist by nominally complying 

with information exchange requirements. Exchange of Information, OECD.ORG 

(October 14, 2013), http://www.oecd.org/ctp/exchange-of-tax-information/. 

24. Organisation for Economic Co-operation and Development, Action Plan 

on Base Erosion and Profit Shifting, (August 10, 2013), http://www.oecd.org/ctp/ 

BEPSActionPlan.pdf. 

25. See id. at 10–11.  



66 Florida Tax Review                   [Vol. 15:2 

 

Second, the OECD lacks the political and diplomatic influence to 

advance the policies it endorses, as evident from the OECD’s efforts on tax 

transparency and harmful tax competition. Therefore, although the OECD 

remains the forum best suited for forging a broad consensus on proposed 

international tax policies, there may be a need for an additional mechanism 

to achieve coordination among a group of countries that share similar 

interests. Sustained high-level political support provided by the G20 to the 

reforms suggested by the OECD may resolve this problem. However, the 

G20’s interest in tax issues became significant only after the financial crisis 

of 2008, and it is undetermined if and for how long the political support of 

the G20 to the OECD will continue.   

Finally, as a forum aiming to address global tax issues, the OECD is 

probably not the most suitable body to discuss issues of interest to only a 

portion of its membership. For example, some countries may have a keen 

interest in collaborating to suppress tax competition harmful to them. This 

form of coordination would not be feasible through the OECD, which is not 

a forum that is conducive to cooperation among only some of its members.  

 

B.  G20 

 

From its inception in 1999 until the financial crisis that arose in late 

2008, the Group of Twenty Finance Ministers and Central Bank Governors 

[hereinafter “G20”] played a limited role in setting tax policy.
26

 The G20 is 

                                                 
26. The G20 was established in 1999 as a forum for both industrialized and 

developing nations to discuss key issues relating to the global economy, economic 

growth, and economic stability. The G7 created the G20 as a response both to the 

financial crises of the late 1990s and to a growing recognition that key emerging 

economies were not being adequately integrated in debates on global economic 

governance. The body of the G20 is composed of the finance ministers and central 

bank governors of nineteen countries and the European Union. There are no formal 

criteria for membership in the G20 and the composition of the group has remained 

unchanged since it was established. The original members of the G7 are Canada, 

France, Germany, Italy, Japan, the United Kingdom and the United States, who were 

later joined by Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, 

Saudi Arabia, South Africa, Republic of Korea and Turkey. In light of the objectives 

of the G20, it was seen as important that the G20 include countries wielding 

considerable influence within the international financial system. Aspects such as 

geographical balance and population representation also played a major part in 

determining membership.  

The G20 usually meets annually at the level of the G20 finance ministers 

and central bank governors.  This meeting is usually preceded by two meetings 

between deputies of the G20, as well as technical work to provide the financial 



2014]    The Unruly World of Tax       67 

an informal forum with no founding legal instrument or voting mechanisms. 

Its decisions are reached by consensus and are not legally binding. Moreover, 

the G20 does not have a permanent secretariat to assist it. The member state 

holding the rotating position of President hosts the annual meeting of the 

G20 and provides secretarial and logistical support.
27

 In 2004, the G20 

released a “Statement on Transparency and Exchange of Information for Tax 

Purposes,” in which it made a commitment “to the high standards of 

transparency and exchange of information for tax purposes that have been 

reflected in the Model Agreement on Exchange of Information on Tax 

Matters as released by the OECD in April 2002” and a call to “all countries 

to adopt these standards.”
28

 However, as noted above, the 2004 statement had 

little effect on the signing of TIE Agreements.     

In the aftermath of the emerging financial crisis in 2008, the role of 

the G20 in the field of international tax policy became more significant. The 

primary indication of the G20’s interest in this field came from its fight 

against tax havens through the improvement of transparency and exchange of 

information.
29

 These statements were backed with political and diplomatic 

                                                                                                                   
ministers and bank governors with a foundation to better inform their consideration 

of policy options. See What is the G20, G20.ORG (August 10, 2013), 

http://www.g20.org/docs/about/about_G20.html.  

27. See id. 

28. The G20 stated that it “strongly support[s] the efforts of the OECD 

Global Forum on Taxation to promote high standards of transparency and exchange 

of information for tax purposes and to provide a cooperative forum in which all 

countries can work towards the establishment of a level playing field based on these 

standards.” See G20, Statement on Transparency and Exchange of Information for 

Tax Purposes (November 21, 2004), http://www.g20.utoronto.ca/2004/2004 

transparency.html. 

29. In a statement issued after the G20 London Summit in 2009, the G20 

expressed the need to “take action against non-cooperative jurisdictions, including 

tax havens. We stand ready to deploy sanctions to protect our public finances and 

financial systems. The era of banking secrecy is over. We note that the OECD has 

today published a list of countries assessed by the Global Forum against the 

international standard for exchange of tax information.” See G20, London Summit – 

Leaders’ Statement, 4 (April 2, 2009), http://www.imf.org/external/np/sec/pr/2009/ 

pdf/g20_040209.pdf. Later, during the Pittsburgh Summit in 2009, a statement by 

the G20 was issued: “We welcome the expansion of the Global Forum on 

Transparency and Exchange of Information, including the participation of 

developing countries, and welcome the agreement to deliver an effective program of 

peer review. The main focus of the [Global] Forum’s work will be to improve tax 

transparency and exchange of information so that countries can fully enforce their 

tax laws to protect their tax base. We stand ready to use countermeasures against tax 

havens from March 2010.” See G20, Pittsburgh Summit – Leaders’ Statement, 10 



68 Florida Tax Review                   [Vol. 15:2 

 

commitments. Thereafter, the number of signed TIE agreements by key 

countries substantially increased. Furthermore, the Global Forum was 

granted additional funding. 

Nonetheless, the G20’s ability to affect international tax policy is 

limited because of several impediments. First, the G20 depends on the 

OECD in a way that limits its ability to originate tax policy. As described 

above, the relationship between the G20 and the OECD is symbiotic: the 

G20 provides high-level political backing, while the OECD develops 

technical standards and monitors implementation.
30

 Therefore, as one 

commentator has noted, the primary role of the G20 is to “syndicate, rather 

than originate, tax policy.”
31

 Moreover, since the G20 depends on the OECD 

for implementation, if tax policies adopted by the G20 are not in accord with 

OECD standards, the latter organization is not likely to implement them. 

                                                                                                                   
(September 24–25, 2009). The G20 has not yet stated what countermeasures are 

being considered against tax havens. See Wouters & Meuwissen, Global Tax 

Governance, supra note 10 at 5–7.   

30. See Wouters & Meuwissen, Global Tax Governance, supra note 17. See 

also Christians, Taxation in a Time of Crisis, supra note 10; Ecceleston, 

Handmaiden to the G20, supra note 14. 

31. See Christians, Taxation in a Time of Crisis, supra note 10 at 29. For 

example, see the G20 statement from February 2013, noting that:  

[W]e welcome the OECD report on addressing base 

erosion and profit shifting and acknowledge that an important part 

of fiscal sustainability is securing our revenue bases. We are 

determined to develop measures to address base erosion and profit 

shifting, take necessary collective actions[,] and look forward to 

the comprehensive action plan the OECD will present to us in July 

[2013]. We strongly encourage all jurisdictions to sign the 

Multilateral Convention on Mutual Administrative Assistance. We 

encourage the Global Forum on Transparency and Exchange of 

Information to continue to make rapid progress in assessing and 

monitoring on a continuous basis the implementation of the 

international standard on information exchange and look forward 

to the progress report by April 2013. We reiterate our commitment 

to extending the practice of automatic exchange of information, as 

appropriate, and commend the progress made recently in this area. 

We support the OECD analysis for multilateral implementation in 

that domain. 

G20, Final Communiqué of Finance Ministers and Central Bank Governors 5 

(February 15–16, 2013). This statement demonstrates how the OECD originates the 

action plans and norms while the G20 provides high-level political support in order 

to effectuate those plans. 



2014]    The Unruly World of Tax       69 

Second, since the G20 is an executive-level forum based on 

consensual decision-making, it tends to avoid taking stances on issues that 

are politically sensitive. This could explain why the G20 refrained from 

taking a tougher stance in the fight against tax havens. Conflicting interests 

among G20 members who accommodate tax havens within their borders, 

such as Hong Kong and Macau in the case of China and the Isle of Man, 

Guernsey, and Jersey in the case of the United Kingdom may also explain 

the G20’s choice not to endorse harsher measures in combating tax havens.
32

 

The G8, which is less active in tax policy issues in the last few years, suffers 

from similar problems.    

Nevertheless, the advantage of the G20 is that it enables cooperation 

in regard to fiscal issues within a relatively small group of influential 

countries. This cooperation may lead to significant advances in proposed tax 

standards, which could not be achieved by the OECD alone.  

 

C.  Other  Forums  

 

Other bodies and international organizations do not provide an 

effective platform for countries to collaborate on tax policy matters. Some of 

these organizations—the United Nations, the European Union, the World 

Trade Organization, the International Monetary Fund, the World Bank, and 

regional and administrative forums—are discussed below.  

The United Nations [hereinafter “UN”] has not been a leading forum 

for international tax policy setting,
33

 although it has made contributions by 

advancing some proposals that affect the tax policy of developing 

countries.
34

 There are a few reasons for the surprising lack of involvement of 

                                                 
32. See Wouters & Meuwissen, Global Tax Governance, supra note 10, at 

7. 

33. The lack of UN leadership in tax issues became apparent at the 

international conferences on financing for development in Monterrey during 2002 

and Doha during 2008, where tax-related issues received limited attention. 

34. Overall, UN activity in this area sought to support developing countries’ 

tax policy, due to the universal membership of the organization. See Wouters & 

Meuwissen, Global Tax Governance, supra note 10 at 16. One major development 

relevant to tax policy that took place at the UN was the adoption of the Model 

Double Taxation Convention Between Developed and Developing Countries 

(hereinafter “UN Model”). Work on this instrument began in 1967 as a response by 

developing countries to the success of the draft of the OECD Model Treaty from 

1963, and its main goal was to eliminate the double taxation impeding the flow of 

investments to developing countries. The UN Model was published in 1980, and 

revised in 2001. See Michael J. McIntyre, DEVELOPING COUNTRIES AND 

INTERNATIONAL COOPERATION ON INCOME TAX MATTERS: AN HISTORICAL REVIEW 



70 Florida Tax Review                   [Vol. 15:2 

 

the UN in tax policy issues. One is that the respective ministries of finance in 

developed countries are ambivalent toward the prospect of the UN becoming 

a major player in fiscal policy, whereas the respective ministries of foreign 

affairs, which are the departments most involved in UN affairs, are usually 

unqualified to deal with tax issues. These institutional and bureaucratic 

realities have in part prevented the UN from being at the forefront of 

international tax policy.
35

  

Similarly, as an inclusive forum, the UN usually adopts the lowest 

common denominator acceptable to all participating states. This effectively 

means that no real change in the status quo is achieved by the UN. Dries 

Lesage, David McNair, and Mattias Vermeiren argue that the negotiating 

blocs, such as the G7, the RIO Group, and the EU that are divided internally, 

come to negotiations with only their respective group’s lowest common 

denominator, prejudicing discussions before a conference is convened.
36

 

Some commentators argue that the UN is inferior to the OECD with 

regard to the UN’s institutional capacity to develop and implement tax policy 

standards.
37

 Although the UN has a permanent committee on International 

Cooperation in Tax Matters, consisting of twenty five experts with a mandate 

to discuss all relevant global tax issues,
38

 most of the committee’s work is 

focused mainly on updating the UN Model Income Tax Convention.
39

 

                                                                                                                   
4–7 (Tax Policy for Developing and Transitional Countries in the Global Economy, 

Working Paper, 2005)  www.michielse.com/files/mcintyre_intl_cooperation.pdf‎.   

While the UN Model mirrored many aspects of the OECD Model, it 

departed from the latter on some major issues in a manner more favorable to 

developing countries. Specifically, it modified the definition of a ‘permanent 

establishment’ to allow additional taxation of business income by the source country 

and provided that any reduction in a country’s statutory withholding rates would be 

done through bilateral negotiations. Additionally, no specific target withholding 

rates were established in the UN Model, and the expectation was that treaties based 

on the UN Model would have higher withholding tax rates on royalties, dividends, 

and interest than those recommended in the OECD Model. The UN Model has been 

effective in influencing tax treaties between developed and developing countries—

virtually all of which have a positive withholding rate on royalty income, and the 

proposed “permanent establishment” article was widely adopted. 

35. See Dries Lesage, David McNair & Mattias Vermeiren, From 

Monterrey to Doha: Taxation and Financing for Development, 28:2 DEV. POL’Y 

REV. 155, 162–64 (2010). 

36. See id.  

37. See id. See also Wouters & Meuwissen, Global Tax Governance, supra 

note 10, at 17.  

38. The mandate of the UN Committee on International Cooperation in Tax 

Matters, is:  



2014]    The Unruly World of Tax       71 

Although the European Union [hereinafter “EU”] has the legal 

authority to coordinate indirect tax issues among its member states, it 

remains limited in its ability to promote other kinds of cooperation. The EU 

has legislative authority over indirect taxes, since these taxes affect the free 

movement of goods and the freedom to provide services. Therefore, the EU 

has set common rules for the operation of value added tax [hereinafter 

“VAT”], and has lowered the limit on VAT rates that can be charged, yet has 

allowed considerable leeway for national differences in VAT rates. Excise 

taxes are also subject to some common rules, but the EU leaves a great deal 

of room for national differences.
40

 In the case of direct taxes, unanimous 

consent of the member states is needed for EU legislation.
41

 This policy is 

based on respect for the principle of fiscal sovereignty.  

However, the European Court of Justice [hereinafter “ECJ”] can 

strike down domestic legislation dealing with direct taxation of a member 

                                                                                                                   
1. Keep under review and update as necessary the United 

Nations Model Double Taxation Convention between Developed 

and Developing Countries and the Manual for the Negotiation of 

Bilateral Tax Treaties between Developed and Developing 

Countries; 2. Provide a framework for dialogue with a view to 

enhancing and promoting international tax cooperation among 

national tax authorities; 3. Consider how new and emerging issues 

could affect international cooperation in tax matters and develop 

assessments, commentaries[,] and appropriate recommendations; 

4. Make recommendations on capacity-building and the provision 

of technical assistance to developing countries and countries with 

economies in transition; 5. Give special attention to developing 

countries and countries with economies in transition in dealing 

with all the above issues. 

See United Nations Economic and Social Council, Res. 2004/69 on Committee of 

Experts on International Cooperation in Tax Matters, E/2004/INF/2/Add.3, at 14, 

(November 11, 2004), http://www.un.org/esa/ffd/tax/overview.htm.   

 39. Dries Lesage, Taxation and the 2008 UN Follow-Up Conference on 

Financing for Development: Policy Recommendations, 5 (2008), www.taxjustice.net 

/cms/upload/pdf/Doha_and_tax_0806_Dries_Lesage.pdf. See also Tax Justice 

Network, The UN is failing on international tax — so the OECD calls the shots 

(June 20, 2008), http://taxjustice.blogspot.com/2008/06/un-is-failing-on-in 

international-tax-so.html. 

40. See European Union, Taxation (August 10, 2013), http://europa.eu/ 

legislation_summaries/taxation/index_en.htm (detailing the relevant EU legislation).  

41. Lilian V. Faulhaber, Sovereignty, Integration and Tax Avoidance in the 

European Union: Striking the Proper Balance, 48 COLUM. J. TRANSNAT’L. L. 177, 

181 (2010) [hereinafter Faulhaber, Tax Avoidance in the EU]. 



72 Florida Tax Review                   [Vol. 15:2 

 

state if it violates “community law,”
42

 that is, the legislation creates an 

unjustified and disproportionate obstacle to the free movement of goods, 

services, and capital throughout the EU’s single market.
43

 The ECJ, in a 

series of cases, struck down anti-avoidance legislation of various member 

states as inconsistent with the “wholly artificial arrangement” doctrine 

endorsed by the Court.
44

 Still, the lack of legislative authority in the EU and 

the legislative vacuum induced by the ECJ are problematic.
45

 Initiatives to 

harmonize the direct tax treatment of EU tax on corporations have been 

unsuccessful so far, mainly because legislation requires a consensus among 

all EU members while some have conflicting interests. It is, in fact, debatable 

whether any harmonization agreement would be accepted by all EU 

members.
46

 Moreover, EU rules apply only (or at least mainly) to relations 

among EU member states. Therefore, this body in its current form is not well 

structured to facilitate cooperation among other countries sharing similar 

interests in regard to tax policy issues.   

The World Trade Organization [hereinafter “WTO”] has an indirect 

effect on its members’ tax policies, as the Agreement on Subsidies and 

Countervailing Measures forbids distortive measures, including government 

revenue foregone or not collected (for example, fiscal incentives such as tax 

credits).
47

 Some possible tax reforms (such as implementing subtraction-

method VAT with border adjustments) might contradict and be barred under 

the WTO rules.
48

 Although some commentators have called for further 

                                                 
42. See id. at 188.  

43. See id. at 189–92.  

44. See id. at 193–200 (providing a detailed description and analysis of the 

Court’s decision). These judicial decisions are limited to the relations between EU 

members—the legislation is valid with regard to relations between an EU member 

and a non-EU member. 

45. See id.  

46. See id. at 226–28. 

47. See Wouters & Meuwissen, Global Tax Governance, supra note 10, at 

25–26. See also World Trade Organization, Subsidies and Countervailing Measures: 

Overview, (August 10, 2013), http://www.wto.org/english/tratop_e/scm_e/subs_ 

e.htm. The case law of the WTO on this issue, banning the use of some fiscal 

policies, has an influence on current and potential domestic tax law of the member 

countries. Some exemptions were banned as “subsidies” by the WTO’s adjudicating 

bodies. See Wouters & Meuwissen, Global Tax Governance, supra note 10, at 25–

29.   

48. See Itai Grinberg, Where Credit is Due: Advantages of the Credit-

Invoice Method for a Partial Replacement VAT, 63 TAX L. REV. 309, 347–349 

(2010). 



2014]    The Unruly World of Tax       73 

intervention of the WTO in tax policy matters,
49

 the WTO currently does not 

foster collaboration—it only sets constraints on tax policies adopted by 

member states. Political conditions make it unlikely that countries would 

agree to allow the WTO to assume some of their sovereignty in tax matters.
50

 

Both the World Bank and the International Monetary Fund 

[hereinafter “IMF”] operate as economic advisors, presenting policy options 

and recommendations, as opposed to forums for negotiation and cooperation. 

The IMF provides technical advice as well as policy advice to member 

states.
51

 The G20 occasionally assigns tasks to the IMF, as it is one of the 

“organizational instruments” of the G7/8 and the G20.
52

 Similarly, the World 

Bank occasionally makes specific recommendations for particular 

                                                 
49. Reuven Avi-Yonah and Joel Slemrod, (How) Should Trade Agreements 

Deal with Income Tax Issues? 55 TAX L. REV. 533–54 (2002). Avi-Yonah and 

Slemrod argue that trade agreements should cover more income tax issues that are 

relevant to enabling free trade with no “predatory tax protectionism.” Id. at 544. 

They also note that the multilateral nature of the trade agreement is more effective 

than the bilateral nature the tax treaties in addressing some problems, such as trade-

distorting and “investment-distorting tax competition.” Id. at 534. 

50. See Brauner, Tax Regime in Crystallization, supra note 10. 

51. See Wouters & Meuwissen, Global Tax Governance, supra note 10, at 

20. For example, tax expenditures and the need to eliminate them are discussed in 

the 2011 edition of the IMF Fiscal Monitor. See International Monetary Fund, Fiscal 

Monitor 99-106 (April 2011), www.imf.org/external/pubs/ft/fm/2011/01/pdf/  

fm1101.pdf. “Ideally, revenue increases would be achieved by widening tax bases 

and removing distortions, rather than by raising tax rates. In many countries, the 

elimination of tax expenditures can contribute to this objective.” Id. at 62. In the 

2010 edition, the IMF recommended increasing revenues efficiently by 

strengthening broad-based taxes on relatively immobile bases, increasing externality-

reducing taxes, and strengthening tax compliance, including through better 

international cooperation. See IMF, Fiscal Monitor 45-47, 4 (May 2011), 

www.imf.org/external/pubs/ft/fm/2010/fm1001.pdf. See also IMF Fiscal Affairs 

Department, The Fiscal Implications of Climate Change 12 (March 2008), 

www.imf.org/external/np/pp/eng/2008/022208.pdf (providing recommendations on 

carbon tax issues). 

52. See Wouters & Meuwissen, Global Tax Governance, supra note 10 at 

20. For example, the statement issued by the Pittsburgh Summit called on the IMF to 

prepare a report regarding the “options countries have adopted or are considering as 

to how the financial sector could make a fair and substantial contribution toward 

paying for any burdens as associated with government interventions to repair the 

banking system.” See supra note 29, at ¶ 16. The IMF report responsive to this 

statement presented and discussed several tax options. See International Monetary 

Fund, A FAIR AND SUBSTANTIAL CONTRIBUTION BY THE FINANCIAL SECTOR 6 (June 

2010), www.imf.org/external/np/g20/pdf/062710b.pdf. 



74 Florida Tax Review                   [Vol. 15:2 

 

developing countries,
53

 and it can condition loans or grants on the adoption 

of its recommendations. Additionally, the World Bank publishes tax policy 

recommendations in different fields, such as carbon taxes,
54

 improving tax 

compliance and administration, and other global or developing-countries-

related issues.
55

 Neither body is a forum dedicated to achieving cooperation 

among countries. The International Tax Dialogue, which was initiated in 

2002 by the IMF, the OECD, and the World Bank, serves as a platform for 

comparative data and analysis of tax issues, but not as a forum for 

negotiation and cooperation.
56

 

Regional tax organizations—such as CIAT,
57

 CATA,
58

 PATA,
59

 

IOTA,
60

 CREDAF,
61

 and ATAF
62

—also have limited capacity to promote 

                                                 
53. See Fred Ojambo, World Bank Calls on Uganda to Widen Tax Base, 

Reduce Dependency, BLOOMBERG (April 7, 2011), http://www.bloomberg.com/news 

/2011-04-07/world-bank-calls-on-uganda-to-widen-tax-base-reduce-dependency.html. 

See also Judith Balea, World Bank: No-new-taxes plan won’t cut deficit, ABS-

CBNNEWS.com (December 8, 2010), http://www.abs-cbnnews.com/business/11/06/ 

10/world-bank-no-new-taxes-plan-wont-cut-deficit.   

54. Gerard Wynn, World Bank To Suggest Global Carbon Tax on Airline, 

Shipping Fuel (Paid by You), REUTERS (June 5, 2011), http://www. 

prisonplanet.com/world-bank-to-suggest-global-carbon-tax-on-airline-shipping-fuel-

paid-by-you.html.  

55. See generally Search for World Bank Group, INTERNATIONAL TAX 

DIALOGUE (August 10, 2013), http://www.itdweb.org/Pages/Search.aspx?st= 

6&sort=2&c=246. 
56. The International Tax Dialogue, or ITD, was initiated in April 2002 by 

the IMF, the OECD, and the World Bank, partly in response to the call issued by the 

Monterrey Conference for enhancing international dialogue on tax matters. It is a 

joint initiative intended to encourage and facilitate the discussion of tax matters 

among national tax officials, regional tax organizations, and international 

organizations. The ITD’s goal is to provide reliable information on all international 

tax matters at the global level, with an emphasis on the publication of professional, 

comparative, or research studies in the field. The ITD’s website is a platform for 

countries to share documents, knowledge, and experience, in order to improve the 

sharing of useful information and avoid duplication of effort. All countries can use 

this website and make contributions. See About Us, INTERNATIONAL TAX DIALOGUE 

(August 10, 2013), http://www.itdweb.org/Pages/AboutUs.aspx. 

57. The Inter-American Center of Tax Administrations, or CIAT, was 

founded in 1967. The CIAT is based in Panama City and has forty member and 

associate countries: thirty-one countries of the Americas, six European countries, 

two African countries, and one Asian country. The organization supports the efforts 

of national governments by promoting the evolution, social acceptance, and 

institutional strengthening of tax administrations, encouraging international 

cooperation, and exchanging of experiences and best practices.   



2014]    The Unruly World of Tax       75 

                                                                                                                   
58. The Commonwealth Association of Tax Administrators, or CATA, was 

founded in 1977-1978 and has forty-eight member countries, most of which are 

developing countries. CATA’s mission is to promote the improvement of tax 

administration of its members in all aspects. To this end, its activities include: 

“holding meetings of technical and administrative personnel in tax administration for 

the exchange of ideas and experiences; organi[z]ing seminars, workshops[,] and 

training courses on aspects of tax administration; collecting, analy[z]ing[,] and 

disseminating information on tax administration; providing directly or, collaborating 

with, and generally facilitating, the work of bilateral and multilateral agencies 

providing technical assistance and research facilities in the field of tax 

administration; generally carrying out functions related to the overall improvement 

of the capabilities of tax administrations through functional co-operation between 

and among Commonwealth countries.” See COMMONWEALTH ASSOCIATION OF TAX 

ADMINISTRATORS CONST. of 1978, Art. II (2004), http://www.catatax.org/resources/ 

our-mission. 

59. The Pacific Association of Tax Administrators, or PATA, was 

established in 1980. The countries comprising this intergovernmental tax group 

consist of Australia, Canada, Japan, and the United States, respectively represented 

by tax officials from their tax authorities. PATA was formed in response to the 

increased use of certain strategies and techniques by transnational corporations to 

evade taxes, including transfer pricing and tax havens. Its members meet at least 

annually to exchange information and identify specific deterrents to tax evasion 

activities. The main products of PATA were exchange of information mechanisms, 

transfer pricing policies, and mutual agreement procedures between PATA members. 

See Susan C. Borkowski, The History of PATA and its Effect on Advance Pricing 

Arrangements and Mutual Agreement Procedures, 17 J. INT’L ACC., AUDITING & 

TAX’N 31–60 (2008). For example, PATA provides principles under which 

taxpayers can create uniform transfer pricing documentation called a “PATA 

Documentation Package” so that one set of documentation can meet each PATA 

members’ transfer pricing documentation provisions. Use of this PATA 

Documentation Package by taxpayers is voluntary and does not impose any legal 

requirements greater than those imposed under the local laws of a PATA member. 

This way a taxpayer can reduce compliance costs of duplicative administrative 

requirements in order to meet the transfer pricing documentation standards of the 

different jurisdictions. Id. 

60. The Intra-European Organization of Tax Administrations, or IOTA, is a 

non-profit organization, founded in 1996-1997, which provides a forum to assist 

member European countries in improving their tax administration. See What is Iota, 

INTRA-EUROPEAN ORGANIZATION OF TAX ADMINISTRATIONS (August 10, 2013), 

http://www.iota-tax.org/about-iota/what-is-iota.html. IOTA’s mission is “to provide 

a forum for discussion of practical tax administration issues, to promote co-operation 

between tax administrations in the European region and to support their development 

according to their individual needs.” Id. 

61. The General Assembly of the Meeting and Studies Center of Tax 

Administration Directors, or CREDAF, first met in 1972 and currently includes 



76 Florida Tax Review                   [Vol. 15:2 

 

collaboration among countries that share similar interests. The major focus of 

these organizations is on tax administration and not broader tax policy issues. 

Moreover, the membership of most of these organizations is generally based 

on geography and not on shared interests in tax policy. 

One current forum that might serve as an example for cooperation in 

tax matters among a small number of countries sharing similar interests is the 

Joint International Tax Shelter Information Centre [hereinafter “JITSIC”]. 

JITSIC was established in 2004 by the tax administrations of the United 

States, the United Kingdom, Australia, Canada, and later Japan, South 

Korea, and China to supplement the ongoing work of tax authorities in these 

countries in identifying and curbing tax avoidance, tax shelters, and those 

who promote them and invest in them.
63

 According to the JITSIC 

Memorandum of Understanding, the member countries each appoint tax 

experts as officials to the JITSIC. The member countries create an Executive 

Steering Group to coordinate, oversee, and evaluate the work of the JITSIC, 

with meetings held periodically in different locations.
64

 Although the JITSIC 

is an interesting example of cooperation among a small number of countries, 

it has a narrow focus and does not deal significantly with policy issues. 

 

  

                                                                                                                   
thirty French speaking countries, with a secretariat located in Paris. See General 

Assembly of the Meeting and Studies Center of Tax Administration Directors, 

CREDAF (August 10, 2013), http://www.credaf.org. 

62. The African Tax Administration Forum, or ATAF, was founded in 2009 

and has thirty-nine member countries. It is a platform to promote and facilitate 

mutual cooperation among African Tax Administrations (and other relevant and 

interested stakeholders) with the aim of improving the efficacy of their tax 

legislation and administrations. See African Tax Administration Forum, ATAF 

(August 10, 2013), http://www.ataftax.net/. Its goals are similar to the 

aforementioned organizations.   

63. See Joint International Tax Shelter Information Centre, Memorandum of 

Understanding (August 10, 2013), www.irs.gov/pub/irs-utl/jitsic-finalmou.pdf 

[hereinafter JITSIC Memorandum]. JITSIC’s purposes are to:  

 Provide support to the parties through the identification 

and understanding of abusive tax schemes and those who promote 

them[;] Share expertise, best practices[,] and experience in tax 

administration to combat abusive tax schemes[;] Exchange 

information on abusive tax schemes, in general, and on specific 

schemes, their promoters, and investors consistent with the 

provisions of bilateral tax conventions[;] Enable the parties to 

better address abusive tax schemes promoted by firms and 

individuals who operate without regard to national borders. Id. 

64. See id.  



2014]    The Unruly World of Tax       77 

III. PROPOSAL: TAX COOPERATION FORUM 

 

A. Applying the “Like-Minded Group” Model to Tax Policy Setting  

 

The most salient feature of international affairs is the absence of a 

global government capable of regulating activity on the international plane. 

This is why scholars of international relations describe the world order as 

anarchic.
65

 However, this does not mean that the world is chaotic—far from 

it. As the world became increasingly globalized, it also became necessary to 

regulate the multitude of global activities of every type and form absent the 

intervention of a centralized authority.
66

 This has led various actors, 

including states, businesses, international organizations, and civil society 

institutions to engage in a dynamic process involving many of the functions 

of governance that traditionally fall to governments. This process, called 

global governance, includes norm creation, standard-setting, and even the 

enforcement of laws and regulations.
67

 It is by nature a decentralized, and at 

times fragmented, process that takes various forms in various fields of 

international affairs.  

The lack of international cooperation and coordination in the field of 

tax policy is, in many respects, a global governance problem. A large group 

of actors, primarily states, have a stake in harmonizing, or at least 

coordinating, tax policies as the actions and decisions taken by any particular 

state might affect the interests of other states. This means that ensuring the 

full effectiveness of national tax policies requires a degree of international 

cooperation to ensure that the measures adopted externally do not undermine 

national policy. Moreover, tax policy affects many other areas of public 

policy, such as monetary and general economic policy. Tax policies adopted 

in foreign countries impact the flow of international investments and affect 

                                                 
65. See generally KENNETH WALTZ, THEORY OF INTERNATIONAL POLITICS 

(McGraw-Hill, Inc., 1st. ed. 1979) (presenting an authoritative statement of this 

claim).  

66. See DAVID HELD & ANTHONY MCGREW, GLOBALIZATION/ANTI-

GLOBALIZATION, 1–12 (Polity Press, 2d ed. 2003). 

67. According to one scholar, “Global governance is governing, without 

sovereign authority, relationships that transcend national frontiers. Global 

governance is doing internationally what governments do at home.” Lawrence 

Finkelstein, What is Global Governance? 1 GLOBAL GOVERNANCE 367, 369 (1995). 

See also James Rosenau, Governance in the Twenty-first Century, 1 GLOBAL 

GOVERNANCE 1 (1995); Klaus Dingwerth & Philipp Pattberg, Global Governance as 

a Perspective on World Politics, 12 GLOBAL GOVERNANCE 185–203 (2006); Thomas 

Weiss, Governance, Good Governance, and Global Governance: Conceptual and 

Actual Challenges 21:5 THIRD WORLD QUARTERLY 795–814 (2000). 



78 Florida Tax Review                   [Vol. 15:2 

 

business transitional decisions. The multiplicity of actors of varying types 

and disparate interests and the absence of a central body to determine and 

enforce policy necessitate the creation of global governance forums that 

bring various stakeholders together to coordinate policies.
68

 

This is the essence of the proposal advanced by this paper. The 

creation of the TCF would fill a gap in the scheme of international tax 

policy-making by providing a setting in which similarly minded stakeholders 

could coordinate their policies.
69

 This proposed TCF would be modeled 

around, but not identical to, what is known as a ‘Like Minded Group’ 

[hereinafter “LMG”] of states, which is a common practice in many 

international organizations, especially the UN. An LMG is a non-

institutionalized, informal gathering of states sharing similar interests 

regarding a specific matter.
70

 The practice in many international 

organizations is that delegations of the member countries meet to agree on 

common positions that satisfy their interests in order to create a negotiating 

bloc in international meetings or conferences. The UN has established such 

LMGs in numerous settings, including the six main committees of the UN 

General Assembly in New York,
71

 the UN Human Rights Council in 

Geneva,
72

 UN specialized agencies, the WTO,
73

 international 

environmental law and policy forums,
74

 and even within the OSCE.
75

 

                                                 
68. See John G. Ruggie, Reconstituting the Global Public Domain—Issues, 

Actors, and Practices, 10:4 EURO. J. INT’L REL. 499–531 (2004). 

69. See H. David Rosenbloom, International Tax Policy: A Current View 

From the United States, 41:3 AUSTRALIAN TAX REV. 133–35 (2012). 

70. See generally Antony J. Dolman, The Like-Minded Countries and the 

New International Order: Past, Present and Future Prospects, 14 COOPERATION 

AND CONFLICT 57 (1979). 

71. The six main committees are First Committee: Disarmament and 

International Security Committee; Second Committee: Economic and Financial 

Committee; Third Committee: Social, Humanitarian, and Cultural Committee; 

Fourth Committee: Special Political and Decolonization Committee; Fifth 

Committee: Administrative and Budgetary Committee; Sixth Committee: Legal 

Committee. See generally M. J. Peterson, THE UN GENERAL ASSEMBLY 80 (Thomas 

G. Weiss & Rorden Wilkinson eds., 1st. ed. 2006).    

72. See Philip Alston, Reconceiving the UN Human Rights Regime: 

Challenges Confronting the New UN Human Rights Council, Center for Human 

Rights and Global Justice, Working Paper No. 4, (2006), http://www.chrgj. 

http://www.chrgj.org/publications/docs/wp/WPS_NYU%20_CHRGJ_Alston_Final.

pdf.  

73. See John S. Odell, Introduction, in NEGOTIATING TRADE: DEVELOPING 

COUNTRIES IN THE WTO AND NAFTA 1, 17 (John S. Odell ed., Cambridge 

University Press, 1st ed. 2006) [hereinafter NEGOTIATING TRADE]. 



2014]    The Unruly World of Tax       79 

An LMG has no permanent premises, no secretariat or staff, and is 

not established pursuant to a treaty or a legally binding instrument. In most 

cases, the presidency of an LMG rotates among member states. In cases 

where the LMG does not fall within the framework of an international 

organization such as the UN, the presiding state would provide secretarial 

services and background papers for the group’s meetings, lead discussions, 

facilitate debates, and speak and negotiate on behalf of the group in other 

forums. 

The principal advantage of an LMG lies in its flexibility. It allows 

states with different views on policy areas generally to cooperate on specific 

matters on which their interests converge. This means that an LMG offers 

countries the opportunity to achieve policy objectives without having to 

overcome the hurdles created by their differences in views on distinct policy 

areas. For example, India and Pakistan, hardly political allies, were members 

of an influential LMG during the Uruguay Round of negotiations that led to 

the establishment of the WTO.
76

  

Furthermore, the LMG model does not require permanent 

membership.
77

 Whenever a state concludes that its interests are no longer 

served by membership in the LMG, it may simply terminate its participation. 

This presents a much lower political cost than formally withdrawing from an 

international organization. Membership in LMGs is usually open to states 

that believe their interests are identical to those of other participating 

                                                                                                                   
74. See Fen Osler Hampson, Climate Change: Building International 

Coalitions of the Like-Minded, 45 INT’L J. 36 (1989). See also John S. Odell & 

Amrita Narlikar, The Strict Distributive Strategy for a Bargaining Coalition: The 

Like Minded Group in the World Trade Organization, 1998-2001 in NEGOTIATING 

TRADE, supra note 73, at 115–144 (prepared for the Conference on Developing 

Countries and the Trace Negotiation Process, UNCTAD, Geneva). 

75. See generally Maria-Pia Kothbauer-Liechtenstein & Mette Kongshem, 

The Group of Like-Minded Countries within the OSCE, OSCE YEARBOOK 2005 at 89 

(2005), http://www.core-hamburgde/documents/yearbook/english/05/KothbauerKon 

gshem-en.pdf.  

76. See Amrita Narlikar & Diana Tussie, The G20 at the Cancun 

Ministerial: Developing Countries and their Evolving Coalitions in the WTO, 27:7 

THE WORLD ECONOMY 947 (2004).  

77. For example, during the 2001 Doha Round of WTO negotiations a like-

minded group of countries was created that included twelve countries and two 

observers. The members included India and Cuba. The fact that the former is the 

world’s largest democracy, while the latter is a communist state, demonstrates the 

flexibility a like-minded group offers. See Amrita Narlikar, Bargaining over the 

Doha Development Agenda: Coalitions in the World Trade Organization, Series 

Latin American Trade Network Papers No. 34 (2005). 



80 Florida Tax Review                   [Vol. 15:2 

 

countries. The latter may invite a new member to attend meetings. Thus, 

participation is a low-key matter and very flexible. Additionally, LMGs do 

not have formal procedures and protocols similar to those in institutionalized 

forums, meaning that meetings can be more efficient and focus sharply on 

matters of interest to participants.  

Meetings of the LMG can be periodic, can be convened whenever 

the need arises, or can be held on the margins of other events. The fact that 

these are informal forums means there is no obligation for any particular 

member country to meet. This is distinguishable from other institutions that 

require members to meet regularly, even if there is no urgent need.  

Finally, LMGs are essentially a negotiating bloc. Members of these 

groups may agree on a joint position that reflects their common interests and 

present a common policy during meetings of international organizations. As 

numbers bring influence, an LMG provides a useful mechanism to increase 

the bargaining power of all members.   

Meetings of LMGs are usually preceded by informal consultations 

between member countries about the agenda and any desired outcomes. In 

many global governance settings, these preparatory consultations are 

undertaken by technical experts and government functionaries. Once the 

LMG concludes these meetings and reaches agreement on what items will be 

discussed and proposed outcomes, the LMG reviews the matters and makes 

the necessary decisions at the policy executive level.  

Most LMGs have been established within the framework of a 

broader international organization, such as the UN or the WTO. The 

members of these LMGs coordinate positions and participate in meetings of 

international organizations as a bloc. The proposal advanced in this Article is 

to create a body that is similar, but not identical, to an LMG. As indicated 

from the above survey of global tax policy forums, there is no central or 

leading international organization that oversees matters relating to taxation. 

Therefore, the proposed TCF would not be established as a negotiating bloc 

within any particular forum.  

Rather, the TCF would act independently as a coordinating forum for 

states whose interests within the field of taxation are similar in at least some 

matters. Those countries would meet in the same manner as an LMG, agree 

on common positions and policies, and then jointly promote those common 

positions in the various organizations that are active in the field of 

international taxation, such as the OECD. In other words, the TCF could 

become a vehicle through which some, but not necessarily all, countries 

could cooperate and agree on positions regarding global tax policy. 

A model that might serve as a guide to the establishment of the 

proposed TCF is the Basel Committee on Banking Supervision [hereinafter 

“BCBS”], which deals with a global governance problem similar to the 



2014]    The Unruly World of Tax       81 

regulation of international taxation.
78

 This committee was established in 

1974 to provide a forum for cooperation and coordination between central 

bank governors of the main world economies.
79

 Similar to the TCF that we 

propose, the presidency of the BCBS rotates among central bank governors 

of the participating states. In addition, the BCBS does not “possess any 

formal supranational supervisory authority, and its conclusions do not, and 

were never intended to, have legal force.”
80

  

Rather, the BCBS has been described as “one of the central organs of 

global economic governance, being both the locus of financial decision-

making and a facilitator for coordinating the actions of other international 

financial institutions.”
81

 This is similar to the functions that the proposed 

TCF could perform, namely to act as a coordinating mechanism among 

players in the field of international taxation who have similar interests, and to 

enable these countries to reach common understandings and agree on joint 

positions that could be adopted in each participating country and advanced 

through other international organizations.   

One group of like-minded countries that could establish a TCF 

would include major developed economies having comparable tax systems 

and interests, such as the United States, the United Kingdom, Germany, 

France, and Japan. Other groups of countries that share similar interests 

could form a TCF as well. Like other LMGs, the TCF would be informal and 

                                                 
78. Like tax policies, fiscal and monetary policies are decided by national 

agencies. However, in an increasingly interconnected world, it is no longer tenable 

for states to set fiscal and monetary policies without considering the international 

ramifications of their domestic decisions. This change created the need for forums 

and mechanisms designed for the global governance of fiscal and monetary affairs. It 

was for this purpose the BCBS was established. Indeed, as one scholar notes, 

“questions concerning the interface between the international nature of banking and 

the domestic character of financial regulation/supervision otherwise faced a 

political/economic/legal vacuum at this time. It was this vacuum that the BCBS 

filled. . . .” Charles Goodhart, THE BASEL COMMITTEE ON BANKING SUPERVISION 6 

(2011).   

79. The membership of the BCBS currently includes the following states: 

Argentina, Australia, Belgium, Brazil, Canada, China, France, Germany, Hong Kong 

SAR, India, Indonesia, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, 

Russia, Saudi Arabia, Singapore, South Africa, Spain, Sweden, Switzerland, Turkey, 

the United Kingdom, and the United States. 

80. Avijit Chatterjee & Cameron Mills, Risk Management, in FIFTH GLOAL 

CONFERENCE OF ACTUARIES, 161 (August 10, 2013), http://www.actuaries.org/ 

EVENTS/Seminars/New_Delhi/Chapters/page-161to179.pdf . 

81. Duncan Wood, GOVERNING GLOBAL BANKING: THE BASEL COMMITTEE 

AND THE POLITICS OF FINANCIAL GLOBALISATION (Ashgate Publishing Limited 

2005).  



82 Florida Tax Review                   [Vol. 15:2 

 

would not exercise legal authority over its members. Its decisions and 

recommendations would not be binding, and it would not require an 

international legal instrument for its establishment. Comparatively, a joint 

statement or communiqué by representatives of the participating states would 

suffice to announce that the TCF would hold regular meetings to coordinate 

tax policies.  

One design question would be whether the TCF should have a 

permanent staff. As noted, LMGs generally do not have a permanent 

secretariat or staff. If the TCF follows that model, a staff would not be costly 

to create. In addition, the agenda of its meetings would not be predetermined, 

but would be agreed upon by members depending on international 

developments currently requiring attention and consideration. However, the 

utilization of a lean staff to facilitate regular communication, prepare 

meetings, and shape the agenda might be beneficial. Costs would still be 

quite low, as demonstrated by the JITSIC experience. Members of the 

JITSIC each appoint tax experts as representatives; there is an Executive 

Steering Group who coordinates, oversees, and evaluates the work of the tax 

experts. Meetings of the JITSIC are held periodically in different locations.
82

 

The implementation of decisions made by a TCF would depend on 

the nature of the issues considered and the understandings amongst its 

members. For example, if participating states decided to adopt certain 

measures that affected only their interests, then each respective state would 

oversee the implementation of those measures domestically. However, if the 

TCF reached an agreement that required further consultation with other 

states, the matter could be brought before the pertinent international forum, 

such as the OECD. The members of the TCF would then submit their 

proposals on the specific matter to these forums. Like any negotiating party, 

the members of the TCF could agree on what they will consider to be their 

non-negotiable bottom lines, in which they might compromise to garner 

greater international agreement.   

In addition, the TCF could invite leading tax scholars and experts to 

attend meetings and express their views on the matters being discussed. 

Representatives from participating governments would benefit from the 

knowledge and expertise of tax scholars who could give their opinions either 

as written submissions or during informal meetings, such as roundtable 

discussions or interactive dialogues. The TCF could also extend invitations 

to its meetings to representatives of international organizations that are 

relevant to the matter being considered by the TCF. 

  

  

                                                 
82. See JITSIC Memorandum, supra note 63. 



2014]    The Unruly World of Tax       83 

B. Where Can the TCF Make a Difference?  

 

TCFs could deal with a wide range of topics. For example, a TCF 

could undertake to promote measures to curtail tax evasion and avoidance. 

As noted in Part II.A, the OECD’s efforts to fight tax evasion have only had 

limited success. Despite the G20’s decisive 2010 statement that it is “ready 

to use countermeasures against tax havens,” no countermeasures were further 

discussed among countries that might benefit from putting pressure on tax 

havens.
83

 The JITSIC focuses on cooperation among tax administrators from 

the United States, the United Kingdom, Australia, Canada, and Japan in 

combating tax avoidance and shelters and focuses less on policy issues. A 

TCF could deal with broader policy issues that the JITSIC does not address 

and could also set goals for tax administrations, instruct them on priorities, 

and promote other collaborative efforts to reduce tax evasion.  

A current example of the lack of cooperation in combating tax 

evasion concerns the choice between automatic information exchange 

(adopted unilaterally by the United States in the Foreign Account Tax 

Compliance Act (FATCA)) or anonymous cross-border tax withholding 

(adopted by the United Kingdom in a treaty signed with Switzerland in 

2011
84

). It is unclear whether the different policies are beneficial to these 

countries, and one may wonder whether a different result would have been 

achieved if the aforementioned countries tried to collaborate on those issues 

in advance.   

A TCF could also promote multilateral harmonization efforts. Many 

commentators have suggested ideas that could improve international tax 

policy, but adoption of those ideas must be multilateral: promoting a 

multilateral tax treaty to address inconsistencies among other treaties and 

multilateral issues that cannot be addressed through a bilateral treaty 

system;
85

 implementing formulaic apportionment of multinational 

companies’ income in a manner that would reduce incentives for income 

shifting through the use of transfer pricing and other planning tools
86

 or other 

alternatives to the current transfer pricing system;
87

 standardizing anti-

                                                 
83. G20, Toronto Summit Declaration, (June 26-27, 2010), http://www. 

whitehouse.gov/the-press-office/g-20-toronto-summit-declaration. 

84. See Grinberg, Capital Income in Emerging Countries, supra note 2.  

85. See Thuronyi, International Tax Cooperation, supra note 3. 

86. See Clausing & Avi-Yonah, Reforming Taxation, supra note 4 

(proposing a formulaic apportionment approach). 

87. See Spencer, Transfer Pricing, supra note 5 (discussing the flaws of the 

current transfer pricing system). 



84 Florida Tax Review                   [Vol. 15:2 

 

avoidance rules, such as the rules regarding CFCs;
88

 addressing situations in 

which an entity is not taxed in any jurisdiction because of differences in tax 

laws; adopting a minimal corporate and capital income tax rate to reduce tax 

competition between countries that have similar economies and tax 

structures;
89

 changing the taxation of intellectual property to limit 

companies’ ability to lower tax liability by use of planning tools, and 

reducing incentives to change location of research and development because 

of differences in tax systems.
90

 Other initiatives that might be beneficial 

include harmonization of reporting rules so as to make compliance less 

costly for taxpayers, standardizing source and transfer pricing rules, 

improving mechanisms for dispute resolution and administrative 

cooperation, and other means of making cooperation in tax administration 

more efficient.   

The lack of cooperation today can likely be explained in several 

ways.  Powerful lobbies, influential multinational companies, and other 

countries can put significant pressure on countries that share similar interests 

to prevent them from cooperating to improve their ability to tax income that 

is currently being evaded or avoided. These forces might limit the ability to 

attain effective cooperation even if the proposed TCF existed.  

However, while there may be inherent reasons why countries do not 

cooperate, the lack of a forum to facilitate collaboration between countries 

definitely does not help the situation. As noted earlier, the lack of 

coordination in the international setting is not unique to tax policy—other 

international institutions face similar difficulties and pressures. Learning 

from other institutional frameworks that are used for cooperation-building 

can be useful for the tax policy setting as well. To the extent institutional 

factors have influence on policy decisions—and we believe they do—

establishing a forum or a process in which countries with similar interests 

will better cooperate can make an actual difference in regard to tax policy 

issues. 

 

C.  Rationale and Advantages 

 

The rationale for this proposal is clear: to enhance cooperation 

among countries that have similar interests in matters of taxation in order to 

                                                 
88. See Burnett, CFC Regimes, supra note 6. 

89. See Sørensen, Case for Coordination, supra note 7 (analyzing the 

harmonization of tax rates on capital income). 

90. See Graetz & Doud, Technological Innovation, supra note 8 (discussing 

this topic and its policy alternatives). 



2014]    The Unruly World of Tax       85 

maximize the national welfare of those countries.
91

 Greater cooperation in 

tax matters may, in turn, reduce current inefficiencies stemming from a lack 

of cooperation so as to increase global welfare as well. Thus, although the 

reduction in sheltering opportunities may hurt some countries that benefit 

from providing tax shelters, it may increase worldwide welfare due to 

efficiency gains.
92

 

The potential cooperation gains are clear. First, countries today face 

a “competitiveness” threat: if a country adopts a strict tax policy that is not 

adopted by competitors, investors may shift their capital and, even if that 

does not occur, local businesses may be placed in an inferior competitive 

position. Thus, even if current tax policy is inefficient and causes social 

waste, a lack of coordination leads countries to stick with it. Cooperation 

among countries having similar policy interests may enable them to suppress 

undesired competition in an effective way.   

Second, cooperation may provide a countermeasure to domestic 

political pressures and lobbies. For example, assume that TCF members 

reach an agreement on a particular anti-tax abuse policy. This policy could 

be undermined by domestic lobbies within individual member countries. 

However, the dynamics of the domestic legislative process may change when 

the policy is a result of collaboration among comparable countries—no one 

country may wish to stand out as rejecting the anti-abuse measures adopted 

by other countries. This may boost local pressure to adopt the proposal.   

Third, cooperation among countries with similar interests increases 

their ability to advance their agenda and reach a broader consensus (such as 

within the G20). Even if broad consensus is not feasible, cooperation in 

adopting a policy change may effectively mitigate the problem of less than 

full cooperation by incentivizing other countries to comply with the policy 

change.
93

 Thus, it may be advantageous for countries to cooperate even if 

                                                 
91. See Michael J. Graetz & Itai Grinberg, Taxing International Portfolio 

Income, 56 TAX L. REV. 537 (2003) (discussing alternative implementations of the 

National Welfare approach). See also Mihir A. Desai & Dhammika Dharmapala, 

Investor Taxation in Open Economics International Tax Policy Forum Working 

Paper No. 3, (2009), http://www.law.northwestern.edu/colloquium/tax/documents/ 

Dharmapala.pdf. 

92. In terms of distribution, very rich countries such as Switzerland and 

Luxemburg are some of the states that will suffer the most from reduction of 

sheltering opportunities. While some impoverished countries who rely on tax 

shelters will suffer as well, it is unclear if the inefficiency they cause justifies the 

distributive gain and whether there are other ways to improve distributive goals and 

simultaneously stimulate economic growth in these countries.  

93. One example of efficiency gains from a collaboration between several 

states is the Streamlined Sales and Use Tax Agreement, which is a multilateral 



86 Florida Tax Review                   [Vol. 15:2 

 

there is no global or OECD consensus. Since the forum is informal, flexible, 

and does not infringe on members’ sovereignty, a potential member may 

achieve cooperation benefits with no significant risk, except in the unlikely 

event that a TCF forms a consensus that is contrary to the policy preference 

of that member.  

Fourth, as reflected in the survey of international organizations 

active in the field of tax policy, negotiations in these bodies are burdened by 

the need to achieve consensus. This inevitably leads to the lowest common 

denominator, which in many cases is not the most efficient and effective 

policy choice. Cooperation within a smaller group would provide an 

alternative to the lowest-common-denominator result. The existence of this 

alternative may increase the leverage of TCF members trying to achieve a 

broader consensus.  

Fifth, when tax issues are discussed within a broader international 

organization, such as the OECD or G20, they naturally must compete for the 

attention of policy makers with other non-tax matters and issues. For 

example, the Ministers of Finance at the G20 have a long list of topics that 

need to be discussed and agreed upon, meaning that international tax policy 

may not receive the requisite attention and consideration. Having a forum 

focused on tax policy would be desirable. Moreover, establishing the forum 

would be practical, inexpensive, and politically feasible. The forum should 

complement the current international institutions and thus should not give 

rise to strong opposition in its formation.  

The proposed model does not impugn the role of the OECD in 

negotiating for a broad consensus, developing standards regarding global 

issues, and providing data and analysis for policy-making. The proposed 

model may even increase the importance of the OECD as a negotiator and 

consensus achiever. In addition, since this forum is informal, flexible, and 

resembles other forums in the international sphere, it would probably be 

readily accepted without opposition. An informal body should not offend 

sensitivities regarding the inclusion or exclusion of different countries. 

   

IV.  CONCLUSION 

 

This Article proposes the implemenation of Tax Cooperation 

Forums, informal forums for coordination among countries that share similar 

                                                                                                                   
agreement between several states in the United States to harmonize their sales tax 

systems (after attempts by states to prevent buyers from avoiding sales wax were 

struck down by the Supreme Court of the United States as a violation of the 

Commerce Clause of the U.S. Constitution). See Faulhaber, Tax Avoidance in the 

EU, supra note 41, at 228–29. 



2014]    The Unruly World of Tax       87 

interests in tax policy, an institution that is currently missing in international 

tax policy-setting. The ability of existing institutions and forums that affect 

tax policy today to achieve effective cooperation in international tax matters 

is both limited and problematic. The proposed model would maximize 

national welfare for cooperating countries, and possibly promote global 

welfare by reducing current inefficiencies. Any group of countries that share 

similar interests in tax policy could establish such a forum. All that would be 

needed for creating the forum is a joint or parallel statement or communiqué 

by the Ministers of Finance of participating states announcing that they 

would hold regular meetings to coordinate their tax policies. 

We mention two major projects this forum could promote—efforts to 

curtail tax evasion and efforts to harmonize different aspects of tax policy. 

The advantages of this model are significant. Cooperation among countries 

sharing similar interests would benefit them by reducing the 

“competitiveness” threat. Such cooperation might be utilized to advance 

policies and achieve consensus in tax matters and, if consensus is not in 

reach, to set a coordinated policy which may be preferable to the status quo 

or acting unilaterally. This model would allow different groups of states 

sharing similar interests to set their own tax policy agendas and cooperate on 

issues that are not of broad interest, which appears practical and feasible. For 

all of these reasons, we believe the proposed model deserves serious 

consideration.