The international tax framework relies on early-twentieth-century principles and favors the interests of the Global North, which created it. It bases taxing rights on a corporation’s physical presence and mostly allocates profits to the country of residence. Moreover, it has been slow to adapt to modern business practices. In the digital economy, companies shift profits with relative ease and often do not require a physical presence in the location of their consumers. International taxation needs reform, but leading proposals do not reflect meaningful input from the Global South and are unlikely to serve the needs of developing countries.
In 2021, the Organisation for Economic Co-operation and Development (OECD), known informally as the “World Tax Organization,” introduced new rules for the cross-border taxation of multinational enterprises. The new rules intend to address the tax challenges of digitalization and profit-shifting, and they are likely the most significant change to international taxation in several decades. However, the OECD does not represent the interests of developing economies, and the proposed reform has not remedied the historic imbalance which disfavors the Global South.
This Article highlights the shortcomings of the OECD’s multilateral efforts in the context of taxation and digitalization. It analyzes the political lawmaking of the OECD and presents the new rules as a compromise that fails to address inequities in cross-border taxation. The Article argues that the reform undermines tax sovereignty and that the current international tax regime overlooks the involvement of the world’s developing countries. It asserts that attempts to promote inclusivity within the OECD have largely been expressive and that the international tax framework inherently disadvantages developing countries and their interests. The Article proposes steps to promote the equal-footed participation of developing countries in future international tax policy initiatives. First, it recommends expanding voting rights for non-members within the OECD. Second, it supports the creation of a new intergovernmental framework within the United Nations that is better positioned to revisit traditional international tax norms through a genuinely inclusive process.
Assaf Harpaz joined University of Georgia School of Law as an assistant professor in summer 2024 and teaches classes in federal income tax and business taxation. Harpaz’s scholarly focus lies in international taxation, with an emphasis on the intersection of taxation and digitalization. He explores the tax challenges of the digital economy and the ways to adapt 20th-century tax laws to modern business practices.
Attendees included Samuel Kuo (LL.M. ’25) and Eman Mistry (J.D. ’25). Both students received a Louis B. Sohn Professional Development Fellowship to support their attendance of this conference. Awarded by the law school’s Dean Rusk International Law Center, Sohn Fellowships enable students to attend professional development opportunities related to international law.
Both Kuo and Mistry attended numerous panel discussions addressing a range of topics in international law. Kuo reflected on the experience, stating:
“I enjoyed the panel on the topic of disclosure in international arbitration moderated by Kelly Turner at the American Arbitration Association, featuring Dorothy Du from Motorola, Charles Kotuby from Three Crowns, Sarah Reynolds from Reynolds ADR and Javier Rubinstein from Rubinstein ADR LLC. The discussion centered upon the use of generative AI in international arbitration practice. All areas of the legal profession are preparing for ethical AI use, and it was refreshing to hear a discussion on whether parties should disclose the use of generative AI in anticipating arbitration.”
To read prior posts about prior recipients of Sohn Fellowships, please click here and here.
During his time in Florence, Kadri will expand his ongoing research pertaining to the legal and technical regulation of AI-generated “deepfakes” and focus on the European regulatory approaches to this topic. In 2024, Kadri authored his third book, Dilemmas in Digital Abuse, which discusses related topics including harmful technological advancements and the corresponding regulatory responses.
Kadri is an Assistant Professor of Law at Georgia Law Law, and his research focuses on torts and criminal law, with an emphasis on how technology, law, and social norms enable and affect privacy, speech, and abuse. His scholarship appears in journals including the Harvard Law Review Forum, UCLA Law Review, Texas Law Review, Utah Law Review, Maryland Law Review, and Journal of Free Speech Law and he has published shorter pieces in The New York Times and Slate. His course offerings include Torts, Cybercrime, and Regulating Digital Abuse.
As Graduate Editors, each LL.M. student conducts citation checks and writes a Comment or Book Review on the legal topic of their choice. The Graduate Editors further facilitate the Journal’s commitment to “including a diversity of perspectives, experiences, and backgrounds within [its] membership,” according to the Editor in Chief, Jasmine Furin (J.D. ’25).
The Georgia Journal of International and Comparative Law is a preeminent forum for academic discussion on current international subjects. From its inception in 1971 as a student initiative supported by former U.S. Secretary of State and Georgia Law Professor Dean Rusk, the Journal features work by legal scholars and practitioners and student notes written by Journal members.
This study examines whether the RRM empowers workers’ voices in the Mexican auto sector. To this end, between January and March 2024, we interviewed 130 workers across seven supplier facilities (auto plants facilities and logistics facilities) and five assembly plants, for a total of 12 facilities. Three of the facilities were not unionized; nine facilities were unionized. Three of the twelve plants had used the RRM (“RRM facilities”), addressing various violations of labor rights, voting processes to approve or reject collective contracts, voting processes to elect independent unions, and dismissals and intimidation of workers in union activism. All three RRM cases were remediated through plans requiring the facility to hold a new legitimization vote and union election and offer worker-level trainings. Our preliminary results problematize some assumptions that drove RRM implementation. The Biden administration and members of the United States Congress have promoted the RRM as a way to strengthen the Mexican government’s efforts to implement Mexican labor law reform, empower workers in productive export sectors, and give them a voice over their labor conditions. Our results suggest that, four years after the implementation of the USMCA and the reforms of Mexico’s labor legislation, a little more than half of the workers are aware of the labor law reform, and opinions are divided on whether it is strengthening labor rights. Some workers thought the reforms were going well, while many thought the reform process was going poorly or did not know how it was going. The majority of workers we interviewed revealed that they did not understand the new democratic procedures to legitimize their collective bargaining agreements, nor that they could access the RRM platform to express their complaints. Nevertheless, the workers we interviewed at RRM facilities tended to be more knowledgeable of the labor law reforms and its attendant rights and processes than those at facilities that have not undergone RRM investigation and remediation, and they tended to view their bargaining representative and conditions of work more favorably. Our study suggests that when workers are given the opportunity to participate in democratic elections under international supervision, after receiving training on the shop floor about their rights and election procedures, they gain knowledge and ownership over their working conditions.
LeClercq joined the University of Georgia School of Law in 2024 as an assistant professor. She teaches International Trade and Workers Rights, International Labor Law, International Law and U.S. Labor Law, as well as the International Law Colloquium. She also serves as a faculty co-director of the Dean Rusk International Law Center and as the faculty adviser for the Georgia Journal of International and Comparative Law.
Amann is Regents’ Professor of International Law, Emily & Ernest Woodruff Chair in International Law, and a Faculty Co-Director of our Dean Rusk International Law Center here at Georgia Law. She has pursued a research-intensive semester this autumn, primarily as a Research Visitor at the Oxford Faculty of Law Bonavero Institute of Human Rights and Visiting Fellow at Exeter College Oxford.
“The Biden administration changed U.S. trade policy significantly when it adopted a “worker-centered” trade policy that justified entering into “frameworks” and not trade agreements. That policy didn’t win many accolades from the trade crowd. Many critics felt that it forewent critical opportunities by refusing to discuss market access in new trade contexts. Without getting into that debate, this post discusses whether the Biden administration’s worker-centered trade policy – and notably, use of that policy under the United States-Mexico-Canada Agreement (USMCA) Facility-Specific Rapid-Response Labor Mechanism (RRM) – will outlive the administration.
I think it will, but it will look different. And some, including labor rights advocates like myself, might prefer the Trump administration’s approach.”
LeClercq joined the University of Georgia School of Law in 2024 as an assistant professor. She teaches International Trade and Workers Rights, International Labor Law, International Law, U.S. Labor Law and the International Law Colloquium. She also serves as a faculty co-director of the Dean Rusk International Law Center and as the faculty adviser for the Georgia Journal of International and Comparative Law.
University of Georgia School of Law Professor Assaf Harpaz presented his draft paper “Global Tax Wars in the Digital Era” at the University of Alabama School of Law as part of the Junior/Senior SEC Workshop.
Below is an abstract of the paper:
Current debates in international taxation often center on how to fairly allocate taxing rights among different jurisdictions. When an enterprise earns income abroad, the country of residence (where the taxpayer resides) and the country of source (where income is generated) have legitimate, competing claims to tax that income. The question is further complicated in a digital economy where profit shifting practices are abundant and businesses no longer require a physical presence in the location of their online consumers.
The international tax system has traditionally favored residence-based taxation. Now, international taxation is at a crossroads with intergovernmental organizations battling to redefine the principles of cross-border taxation. The regime has been dominated by the Global North through the Organisation for Economic Co-operation and Development (OECD), which has drawn backlash due to its undemocratic procedure and unfavorable outputs for developing countries. The United Nations has held a relatively peripheral role in global tax governance, which is poised to change with an upcoming UN Framework Convention on International Tax Cooperation – an initiative overwhelmingly supported by developing countries.
This article explores the “tax wars” surrounding the leadership for global tax governance, contrasting the taxing powers and interests of the OECD-led Global North with those of the UN-backed Global South. It highlights the distortive outcomes created by outdated international tax principles and argues for a shift toward source-based taxation. To do so, it proposes revisiting the permanent establishment standard in model treaty language, creating an opportunity for broader taxation of business profits in the source country. This transition will address longstanding disparities and is increasingly warranted in a digital economy that does not rely on physical presence.
Assaf Harpaz joined University of Georgia School of Law as an assistant professor in summer 2024 and teaches classes in federal income tax and business taxation. Harpaz’s scholarly focus lies in international taxation, with an emphasis on the intersection of taxation and digitalization. He explores the tax challenges of the digital economy and the ways to adapt 20th-century tax laws to modern business practices.
University of Georgia School of Law Professor Diane Marie Amann recently gave a public lecture entitled “Child-Taking: Unlawful Transfer plus Identity Alteration, in Ukraine and Beyond,” at the University of Reading School of Law in Reading, United Kingdom, as part of that law school’s Global Law at Reading (GLAR) lecture series.
Her presentation drew upon her just-published article, “Child-Taking,” 45 Michigan Journal of International Law 305 (2024).
Amann is Regents’ Professor of International Law, Emily & Ernest Woodruff Chair in International Law, and a Faculty Co-Director of our Dean Rusk International Law Center here at Georgia Law. This fall, she is spending a research-intensive semester in the United Kingdom, where she is a Research Visitor at the Oxford Faculty of Law Bonavero Institute of Human Rights and Visiting Fellow at Exeter College Oxford.
exchange of notes 