University of Georgia School of Law Professor Assaf Harpaz recently presented his draft paper, “Global Tax Wars and the Shift to Cross-Border Taxation”, at the 2024 National Business Law Scholars Conference, held at the UC Davis School of Law. This is the fifteenth meeting of the NBLSC, an annual conference that draws legal scholars from across the United States and around the world.

Below is an abstract from the draft paper:

International taxation is at a crossroads. In a rapidly evolving digital economy, intergovernmental organizations are battling to shape the cross-border tax agenda. Global North economies have dominated this regime through the Organisation for Economic Co-operation and Development (OECD), which has drawn backlash due to its undemocratic procedure and unfavorable outcomes for developing countries. Meanwhile, the United Nations has occupied a relatively peripheral role in global tax governance. Nonetheless, in 2023, developing countries overwhelmingly supported the establishment of a new Framework Convention on International Tax Cooperation within the UN. The unprecedented initiative marks a novel challenge to the Global North’s hegemony in international tax policymaking.

This article conceptualizes the contemporary international tax discourse as “tax wars.” It contrasts the taxing powers and interests of the OECD-led Global North with those of the UN-backed Global South. The article argues for a shift towards source-based taxation, drawing on procedural and distributive justice principles. To do so, the article proposes expanding 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 will teach 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.